Driving Sustainable Green Innovation Through Intelligent Manufacturing Policies: A System Transformation Perspective

The transition toward sustainable manufacturing requires an understanding of how industrial policies shape firms’ long-term green innovation capabilities. This study investigates the impact of China’s intelligent manufacturing pilot policy on enterprises’ sustainable green innovation, conceptualizing the policy as an exogenous driver of systemic transformation at the firm level. Using multi-period difference-in-differences (DID) regression on an unbalanced panel dataset of Chinese listed companies from 2010 to 2023, we find that the intelligent manufacturing pilot policy exerts a significantly positive effect on enterprises’ sustainable green innovation. Mechanism analyses reveal that the policy promotes sustainable green innovation through three pathways: facilitating digital transformation, alleviating financing constraints, and enhancing ESG performance. Heterogeneity analysis further indicates that the policy effects are more pronounced in eastern regions, among non-state-owned enterprises, in non-heavily polluting industries, and in technology-intensive industries. These findings provide insights into how systemic policy interventions can drive sustainable innovation at the firm level, with implications for policymakers and enterprises seeking to align industrial upgrading with long-term green development. These findings are interpreted through a system transformation lens, where intelligent manufacturing policies trigger co-evolutionary changes across digital, financial, and governance subsystems.