Against the backdrop of deep integration of technological innovation and industrial innovation, this study constructs a theoretical model incorporating market and government behavior. Utilizing panel data from 284 prefecture-level cities across China from 2013 to 2023, it empirically analyzes the roles and mechanisms of efficient market and proactive government in facilitating the deep integration. Findings indicate that the market’s “push–pull mechanism” promotes the deep integration of technological and industrial innovation, enhancing output performance. However, market mechanism exhibits diminishing marginal output performance: beyond a certain threshold, the force to drive further performance improvements weakens. The government’s role can positively influence the market mechanism’s ability to drive deep integration of technological innovation and industrial innovation, and growth in output performance. In coordinating government and market efforts, the following principles should be observed: as market mechanism matures, gradually enhance technological innovation by allocating human capital to research activities, particularly basic research; formulate industrial policies that progressively prioritize science and technology innovation activities; and advance the development of public goods, such as technology transfer and commercialization platforms. To advance the deep integration of technological and industrial innovation, policy implications include consistently leveraging market mechanisms, coordinating government and market efforts to design policies for capital and talent mobility, and promoting the construction of conversion platforms like concept-validation centers and science incubators.
Li et al. (Thu,) studied this question.