Intelligent Manufacturing and Firm Markup: Evidence from China

Yongwei Yea, Boyang Xieb, Zhaoda Liub,*, Yiyu Wang

ABSTRACT

Intelligent technologies are increasingly integrated into traditional manufacturing, making it essential to assess their economic implications for production and operational decisions. However, the link between intelligent manufacturing and firms’ markup remains unclear. Using a quasi-natural experiment based on China’s Intelligent Manufacturing Pilot Demonstration Projects,  this  study examines how intelligent manufacturing affects firms’ markup. The findings show that intelligent manufacturing significantly increases markup, driven by innovation incentives and efficiency-enhancing effects. Heterogeneity tests indicate that this positive influence is stronger in firms with higher capital intensity, in more competitive industries, and in regions with richer human capital. Overall, the study demonstrates that intelligent manufacturing can effectively raise firms’ markup and offers guidance for  emerging economies seeking to  upgrade and  transform their manufacturing sectors through advanced digital technologies.

Keywords:

Intelligent manufacturingFirm markupInnovation incentive effectEfficiency empowerment effec