Can Smart Manufacturing Pilot Policy Curb Firms’ Symbolic Digital Transformation? Evidence from China Using Double Machine Learning

Symbolic digital transformation, whereby firms overstate digital initiatives through digital narratives without substantive upgrading, may undermine the developmental value of industrial digitalization. This study examines whether China’s Smart Manufacturing Pilot Policy (SMPP) curbs such behavior. Using panel data on Chinese A-share listed manufacturing firms from 2011 to 2024, we treat the staggered implementation of the SMPP as a quasi-natural experiment and estimate policy effects within a double machine learning framework. The baseline results show that the SMPP significantly reduces firms’ symbolic digital transformation (SDT), and this finding remains robust to alternative specifications and endogeneity tests. Dynamic effect analysis indicates that the policy generates a persistent restraining effect, although its marginal effect gradually declines as governance becomes more normalized over time. Mechanism analysis shows that the policy mainly works by easing financing constraints and reducing information asymmetry, while increased media attention creates a countervailing reputational incentive that may encourage SDT. Threshold analysis further reveals that the policy effect is stronger among firms with higher managerial myopia and is most pronounced when corporate opacity is moderate, but becomes insignificant once opacity exceeds a critical level. Overall, the SMPP promotes a shift from symbolic to substantive digital transformation and may provide indirect implications for sustainable manufacturing development.