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The Impact and Mechanisms of Smart City Policies in Promoting Enterprise Digital Transformation

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  • Long Song
  • Ruiting Sun

Abstract

Amid global economic restructuring, enterprise digital transformation has emerged as a critical strategy for enhancing competitiveness and upgrading industrial structures. As a major policy instrument to foster the digital economy, the effects of China's smart city pilot program on enterprise digital transformation remain insufficiently understood. Drawing on data from Chinese A‐share listed firms over the period 2007–2024, this study employs a multiperiod difference‐in‐differences (DID) design to evaluate the policy's impact and to investigate its underlying mechanisms and heterogeneity. The findings indicate that the smart city initiative significantly accelerates enterprise digital transformation, primarily through three production factors: talent agglomeration, technological innovation, and capital support. Heterogeneity analyses further reveal that the effects differ across firms, industries, institutional contexts, and regions. These results provide new insights for optimizing smart city policy design to promote more effective digital transformation of enterprises.

Suggested Citation

  • Long Song & Ruiting Sun, 2026. "The Impact and Mechanisms of Smart City Policies in Promoting Enterprise Digital Transformation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 47(2), pages 339-356, March.
    • Handle: RePEc:wly:mgtdec:v:47:y:2026:i:2:p:339-356
    DOI: 10.1002/mde.70033
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