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Intelligent manufacturing and Firm Markup: Evidence from China

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  • Ye, Yongwei
  • Xie, Boyang
  • Liu, Zhaoda
  • Wang, Yiyu

Abstract

Intelligent technologies are increasingly integrated into traditional manufacturing, making it essential to assess their economic implications for production and operational decisions. However, the link between intelligent manufacturing and firms' markup remains unclear. Using a quasi-natural experiment based on China's Intelligent Manufacturing Pilot Demonstration Projects, this study examines how intelligent manufacturing affects firms' markup. The findings show that intelligent manufacturing significantly increases markup, driven by innovation incentives and efficiency-enhancing effects. Heterogeneity tests indicate that this positive influence is stronger in firms with higher capital intensity, in more competitive industries, and in regions with richer human capital. Overall, the study demonstrates that intelligent manufacturing can effectively raise firms' markup and offers guidance for emerging economies seeking to upgrade and transform their manufacturing sectors through advanced digital technologies.

Suggested Citation

  • Ye, Yongwei & Xie, Boyang & Liu, Zhaoda & Wang, Yiyu, 2026. "Intelligent manufacturing and Firm Markup: Evidence from China," Economic Modelling, Elsevier, vol. 155(C).
    • Handle: RePEc:eee:ecmode:v:155:y:2026:i:c:s0264999325004201
    DOI: 10.1016/j.econmod.2025.107425
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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

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