Does Industrial Internet technologies matter for corporate idiosyncratic risk? Evidence from a technological empowerment perspective

This study utilizes Word2Vec to analyse corporate information disclosures and assess the impact of Industrial Internet technologies on the idiosyncratic risk of Chinese manufacturers for the period 2010–2022. It introduces a technological empowerment framework where such technology enhances organizational capabilities by optimizing resources, restructuring costs, and promoting innovation, offering a new perspective on risk management beyond mere information exchange. The findings indicate that Industrial Internet technologies significantly reduce corporate idiosyncratic risk by lowering cost stickiness and improving innovation quality. Notably, the decline in cost stickiness is more prominent in firms with higher labour intensity. Meanwhile, the boost in innovation quality is especially strong in firms with high levels of capital, technology, and labour intensity. This suggests that the interaction between technological empowerment and innovation quality creates a more effective risk reduction mechanism. Heterogeneity analysis further reveals that in industries with greater competition and regions with a higher concentration of Industrial Internet platforms, the risk-reducing effects are even more pronounced. This study highlights the role of industrial Internet technology as a systemic enabler on the supply side, providing practical strategies and theoretical support for the manufacturing sector to achieve high-quality development through fostering innovation and optimizing cost structures.