Network dynamics of inter-firm innovation in China’s digital economy: a two-layer network perspective

As China's digital economy rapidly evolves, understanding the underlying innovation networks driving this growth becomes increasingly important. Existing research often overlooks the multilayered and dynamic nature of these networks. To address this gap, this study explores the multilayer structure and dynamics of innovation networks in China's digital economy by constructing a two-layer inter-firm network. Employing Social Network Analysis and Exponential Random Graph Model (ERGM), we analyse the evolution of innovation network through the budding, growth, and maturity periods. Our findings show that the collaboration network evolved from a centralised structure to an interconnected network with emerging clusters and, ultimately, to a mature, strategically focused ecosystem. The knowledge network transitioned from isolated core technologies to a highly integrated, interdisciplinary network. ERGM results indicate a consistent preference for knowledge diversity across all periods, with a shift from centralisation during the growth period toward a more distributed structure. By the maturity period, firms engaged in more balanced and strategic collaborations, integrating diverse knowledge sources while avoiding over-centralisation. This study offers new insights into the dynamic formation of innovation networks in the digital economy, highlighting the roles of knowledge integration and collaboration in driving innovation.