Smart Cities Policy and Corporate Total Factor Productivity: Evidence from China

The smart cities policy (SCP) is one of the key initiatives driving digital transformation in China, delivering a significant digital impact on enterprises within the region. This paper employs a multiple-period difference-in-differences (DID) model to systematically analyze the impact of the SCP on total factor productivity (TFP) of A-share listed companies in China. The results show that the SCP significantly enhances enterprise TFP. Heterogeneity analysis reveals that the policy has a more pronounced positive effect in regions with stronger intellectual property protection, as well as in non-manufacturing sectors and state-owned enterprises (SOEs). Furthermore, the SCP improves enterprise TFP through various dimensions, such as boosting innovation capacity, optimizing human capital structure, reducing operational costs, and improving investment efficiency. This study provides a solid theoretical foundation and policy recommendations for the further optimization and promotion of the SCP.