Smart City Pilot Policies and Enterprise Finance Mismatch

The smart city pilot policy (SCPP) serves as both a key practical vehicle through which science-and-technology policies steer financial innovation and an effective instrument for firms to narrow financial gaps and allocate resources more efficiently. Leveraging a difference-in-differences (DID) design, this paper examines how the SCPP shapes enterprise financial mismatch (EFM), drawing on an unbalanced panel that spans 246 Chinese cities and their constituent firms between 2007 and 2022. It is found that the SCPP significantly reduces EFM in the implemented areas by 0.8% on average. The policy has had a significant impact in eastern regions, non-state-owned enterprises, and high-tech enterprises, while the policy effect is not significant in the middle and western regions, state-owned enterprises, and non-high-tech enterprises. In addition, the SCPP affects EFM by alleviating corporate financing constraints, improving maturity mismatch, and enhancing scientific and technological innovation. The findings provide a scientific basis for optimizing the design and implementation of smart city policies.