The impact of smart city policy on a firm’s supply chain performance: evidence from China

Information from the abstract

Purpose This study aims to examine the impact of smart city policy on firm-level supply chain performance. It further evaluates the moderating role of firms’ internal digital transformation and explores whether the policy effect varies across different city and firm contexts. Design/methodology/approach Using the rollout of the “National Smart City Pilot Lists” as a quasi-natural experiment, this study employs a difference-in-differences (DID) approach based on firm-level panel data from 2007 to 2021. Findings Smart city policy significantly improves firms’ supply chain performance, as reflected in faster inventory turnover. This positive effect is negatively moderated by firms’ internal digital transformation, suggesting a substitution effect in which highly digitalized firms obtain smaller marginal benefits from improvements in external public infrastructure. In addition, the policy effect is more pronounced in eastern regions, non-coastal cities, core cities and firms with low financing constraints. Practical implications Findings suggest that policymakers should consider regional and firm-level differences in policy effectiveness. Smart city policy yields greater operational benefits in cities with stronger administrative and infrastructure capacity, while less digitalized firms benefit more from public digital infrastructure than highly digitalized firms overall. Originality/value This study provides novel micro-level evidence on the operational effects of China’s smart city policy. It contributes to the literature by linking a macro-level urban policy to firm-level supply chain performance and by identifying the boundary conditions of policy effectiveness, particularly the substitution mechanism between external public infrastructure and firms’ internal digital capabilities.

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Related topics: Smart Cities and Technologies · Global Urban Networks and Dynamics · Urban and Freight Transport Logistics