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Smart supply chains and industrial upgrading: evidence from China

Author

Listed:
  • Xuxin Zou
  • Wenguan Dai
  • Shuang Meng
  • Jianghui Liu

Abstract

Supply chain disruptions and market volatility remain persistent challenges in developing economies, often hindering efforts towards industrial upgrading. This study investigates how smart supply chain policies reshape the rationalization and sophistication of industrial structures, using China’s Pilot Program of Innovation in and Application of Supply Chain as a quasi-natural experiment. Leveraging panel data from 284 cities between 2005 and 2021, we employ a difference-in-differences approach to identify causal effects. The results show that the pilot program significantly improves both the rationalization and sophistication of local industrial structures. Mechanism analysis reveals that the policy enhances urban innovation capabilities and stimulates consumer vitality, which in turn facilitate structural transformation. These findings highlight the role of smart supply chain policy as a strategic lever for coordinated industrial upgrading in developing countries, contributing to broader discussions on industrial policy and sustainable growth.

Suggested Citation

  • Xuxin Zou & Wenguan Dai & Shuang Meng & Jianghui Liu, 2026. "Smart supply chains and industrial upgrading: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 58(31), pages 6159-6173, July.
    • Handle: RePEc:taf:applec:v:58:y:2026:i:31:p:6159-6173
    DOI: 10.1080/00036846.2025.2610517
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