Smart City Construction, Artificial Intelligence Development, and the Quality of Export Products: A Study Based on Micro-Level Data of Chinese Enterprises

Abstract

Quality improvement is essential for a nation’s economy to transition from large to strong. In the 21st century, a new wave of quality development has emerged globally, and upgrading the quality of enterprise export products is a key measure for driving exports and supporting high-quality economic development. The development of artificial intelligence, as the new core engine driving technological revolution and industrial transformation, will profoundly alter various aspects of economic activities, including production, distribution, exchange, and consumption. Exploring and cultivating new artificial intelligence-driven momentum to enhance the quality of enterprise export products is inevitably a major theoretical and practical issue of common interest to governments, enterprises, and academia. This paper uses China, a major developing and export-oriented economy, as a case study to explore the policy measures for stimulating new momentum in artificial intelligence development and their effects and transmission mechanisms on improving the quality of enterprise export products. Specifically, it constructs a theoretical model to examine the relationship between smart city construction, artificial intelligence development, and the quality of enterprise export products. By considering the smart city construction projects launched by the Chinese government as a quasi-natural experiment to facilitate artificial intelligence development, the study employs matched city-enterprise data from 2007 to 2015 and utilizes a difference-in-differences (DID) methodology to empirically test the impact of smart city construction on enhancing the quality of enterprise export products. According to the study, the policy-driven nature of smart city construction significantly enhances the quality of enterprise export products. This beneficial impact is particularly evident in the eastern regions, as well as in labor-intensive and capital-intensive industries, and among foreign-invested and private enterprises. Mechanism tests and additional analyses indicate that artificial intelligence development is significantly more advanced in smart cities than in non-smart cities, with the gap between them steadily widening. The construction of smart cities significantly advances artificial intelligence development, which subsequently enhances the quality of enterprise export products. Furthermore, smart cities can substantially contribute to this improvement by facilitating a more efficient, market-oriented allocation of resources.