Exploring the Solow Paradox: Evidence from a Quasi-Natural Experiment in China on Smart City Pilots and Corporate Total Factor Productivity
Publication: Journal of Urban Planning and Development
Volume 150, Issue 4
Abstract
The development of smart cities plays a crucial role in facilitating the integration of economic and ecological benefits within urban contexts. However, whether this could benefit firms has received limited attention in existing studies. This study aims to investigate the relationship between smart city pilots (SCPs) and corporate total factor productivity (TFP), examining the potential mechanisms and different heterogeneities. Utilizing a difference-in-difference strategy with Chinese listed firms’ data from 2005 to 2020, a quasi-natural experiment was conducted to test the proposed hypotheses based on the three batches of SCPs in China from 2012 to 2014. The empirical analyses showed that SCPs can significantly decrease corporate TFP (β = −0.075, p < 0.01). It was further revealed that this association is mediated by corporate governance practices (z = −2.4, p < 0.05). Moreover, the results uncovered the presence of heterogeneities, particularly concerning geographical location and urban scale, with a stronger inhibitory impact on TFP in the eastern region and supercities. These findings provide empirical evidence supporting the Solow paradox theory and furnish insightful references for other similar developing countries to refine the strategies in smart city development, thereby achieving more favorable outcomes.
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Data Availability Statement
Some or all data, models, or codes that support the findings of this study are available from the corresponding author upon reasonable request.
Acknowledgments
This study was funded by the National Natural Science Foundation of China (72271126, 72372079), the Qinglan Project of Jiangsu Province, and the Shenzhen Science and Technology Innovation Commission (JCYJ20220818102211024).
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Published In
Journal of Urban Planning and Development
Volume 150 • Issue 4 • December 2024
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© 2024 American Society of Civil Engineers.
History
Received: Dec 19, 2023
Accepted: Jun 11, 2024
Published online: Aug 9, 2024
Published in print: Dec 1, 2024
Discussion open until: Jan 9, 2025
ASCE Technical Topics:
- Business management
- Chemical properties
- Chemistry
- Data collection
- Economic factors
- Ecosystems
- Engineering fundamentals
- Environmental engineering
- Heterogeneity
- Infrastructure
- Light rail transit
- Methodology (by type)
- Practice and Profession
- Public transportation
- Rail transportation
- Research methods (by type)
- Transportation engineering
- Urban and regional development
- Urban areas
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