Intelligent Manufacturing Demonstration Projects Driving Corporate ESG Ratings: An Analysis Based on Innovation Efficiency and Cost Management

This study examines whether China’s Intelligent Manufacturing Demonstration Projects (IMDPs, 2015–2018) can improve firms’ environmental, social, and governance (ESG) performance and thereby strengthen the quality of green transformation in manufacturing. Exploiting the staggered rollout of IMDPs as a quasi-natural experiment, we combine propensity score matching with a multi-period difference-in-differences design using panel data on Chinese listed manufacturing firms from 2009 to 2022. We find that IMDP participation increases ESG ratings by approximately 0.14 rating levels relative to comparable non-participating firms. Mechanism analyses suggest that the effect operates through higher innovation efficiency and improved cost management, consistent with a channel of capability upgrading and resource reallocation toward sustainability-related activities. The effect is stronger for firms under intense competitive pressure, at the growth stage, and in capital-scarce industries, indicating that industrial policy can be particularly valuable where market frictions constrain green investment. Importantly, we go beyond ESG scores by constructing measures of greenwashing and ESG rating uncertainty, and show that IMDPs reduce greenwashing and lower ESG uncertainty. These results imply that intelligent manufacturing policies can generate economically meaningful benefits by improving firms’ sustainability performance and the credibility of ESG information, which are central to capital allocation and the effectiveness of green governance.