Promoting innovation in the manufacturing industry and promoting high-quality development of the industrial economy are important policy guidelines of the country. Taking the most representative industrial enterprises above designated size in the industrial economy as the research object, innovation modes are divided into two categories: product or process innovation and organizational or marketing innovation. Panel data from 31 provinces in China (excluding Hong Kong, Macao, and Taiwan) for a total of 7 years from 2016 to 2022 are selected, and a panel binary choice model is used to empirically analyze the internal and external influencing factors of industrial enterprise innovation mode selection in each province, revealing the specific reasons why industrial enterprises in each province choose different innovation modes. It is found that: Firstly, the higher the regional economic level and local R&D manpower investment, the more inclined the industrial economy is towards organizational or marketing innovation. The more innovative achievements there are in the local area, the more inclined the industrial economy is towards product or process innovation. Secondly, the higher the proportion of large enterprises, the more inclined the industrial economy is towards organizational or marketing innovation. Thirdly, when selecting innovation models for industrial enterprises above a certain scale, the main influencing factor is not the industrial enterprise itself, but rather the external social environment factors of the location where the enterprise is located, especially the regional economic level, local R&D manpower investment, and local innovation achievements. Fourthly, industrial enterprises choose too many organizational or marketing innovation modes, and there is a phenomenon of market failure in industrial economic innovation. Based on this, suggestions are made: Firstly, in order to achieve more product or process innovation results, policy makers should introduce policies to adjust industrial organizational structure, guide and restrict corporate mergers and acquisitions, oppose large enterprise monopolies, increase free competition among enterprises, and encourage the development of small and medium-sized enterprises. If choosing organizational or marketing innovation models, policy makers should encourage corporate mergers and the formation of more large enterprise groups, committed to enhancing the international competitiveness of large industrial enterprises. Secondly, when the local economic level is high and there is a significant investment in research and development manpower, but there are few local innovation achievements, industrial enterprises should prioritize organizational or marketing innovation models. When the local economic level is not high and there is less investment in R&D manpower, but there are more local innovation achievements, industrial enterprises should prioritize choosing product or process innovation models. Thirdly, policy makers need to attach great importance to the local socio-economic environment when planning innovative models for industrial enterprises. Funds and manpower should be invested to conduct sufficient research on the local economic level, R&D manpower investment, and innovation achievements. Fourthly, in order to promote industrial enterprises to carry out more product or process innovation, policy makers should adopt various policy measures such as bank credit, fiscal subsidies, and tax incentives to help industrial enterprises reduce their initial R&D investment, lower the cost of product or process innovation, compensate for market failures, and guide industrial enterprises to adopt more scientific and reasonable innovation mode choices.

product or process innovation  /  organizational or marketing innovation  /  industrial enterprise  /  innovation mode