Pressure or motivation? The effects of low-carbon city pilot policy on China’s smart manufacturing

Abstract

In the pursuit of carbon neutrality goals, the manufacturing industry is compelled to adopt smart manufacturing practices to comply with environmental regulations. Smart manufacturing, characterized by the integration of Industry 4.0 technologies, offers the potential to reduce energy consumption, emissions, and enhance productivity. This study investigates the influence of the low-carbon city pilot (LCP) policy on smart manufacturing and its underlying mechanisms. Leveraging data spanning 2003 to 2020 from China’s A-share-listed manufacturing companies, several key findings emerge. First, the LCP policy exerts a significant positive impact on the smart manufacturing capabilities of companies operating within LCPs. Furthermore, this impact strengthens over time. Second, a company’s innovation and effective resource allocation act as active mediators in the correlation between the LCP policy and smart manufacturing, whereas government intervention plays a positive moderating role. Lastly, state-owned manufacturing companies exhibit a lesser positive effect from the LCP policy compared with their non-state-owned counterparts in terms of smart manufacturing. Moreover, the positive effect of the LCP policy on manufacturing companies in cities with traditional industrial bases is relatively smaller than that in cities with emerging industrial bases. Building upon these findings, this study offers targeted recommendations to promote smart and sustainable manufacturing.