Towards sustainable development: ESG incentive effect of China's Intelligent Manufacturing Pilot Demonstration Policy

In light of the prevailing circumstances of global warming and the increasing frequency of extreme climates, China has put forth the "dual carbon goals" policy, which establishes more rigorous standards for the advancement of traditional manufacturing industries. This paper employs a difference-in-differences model to explore the influence of intelligent manufacturing on ESG and sustainable development, drawing upon the Intelligent Manufacturing Pilot Demonstration Policy (IMPDP) as a point of reference. The results reveal that: (1) Intelligent manufacturing enhances the ESG performance of businesses, and this effect remains consistent even when subjected to serial robustness tests, PSM-DID, and placebo tests. (2) The three primary mechanisms that mediate the impact of intelligent transformation on ESG are the reduction of information asymmetry, the alleviation of financing constraints, and the promotion of green innovation. (3) Intelligent manufacturing has a more pronounced effect on ESG of capital-intensive industries, non-heavily polluting sectors, and companies located in the eastern region. (4) Further analysis using the two-stage model reveals that after intelligent manufacturing improves ESG performance, it can improve the environmental and financial performance, thereby achieving sustainable development. The conclusions of the research provide valuable insights for modernizing and transforming traditional manufacturing sectors, as well as for the long-term, sustainable growth of businesses.