Intelligent Manufacturing and Corporate Offshoring Production: Estimation Based on Heterogeneity-Robust Nonlinear Difference-in-Differences Method

Jing Lu and Jie Xu ()
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Jing Lu: School of Economics, Zhejiang University, Hangzhou 310058, China
Jie Xu: School of Economics, Zhejiang University, Hangzhou 310058, China

Sustainability, 2025, vol. 17, issue 13, 1-21

Abstract: Under the background of globalization and the latest technological changes, many enterprises ensure corporate competitiveness and sustainable development by deploying production globalization and transforming production modes. This paper proposes a task-based enterprise model to study how enterprises’ production mode transformation toward intelligent manufacturing affects corporate offshoring production. Intelligent manufacturing forms relative push–pull forces on corporate offshoring production through reshoring effects and offshoring effects on the extensive margin of task sets while promoting corporate offshoring production through productivity effects on the intensive margin. Empirically, this paper constructs a staggered quasi-natural experiment using China’s Intelligent Manufacturing Pilot Demonstration Projects (IMPDP), adopts the heterogeneity-robust nonlinear Difference-in-Differences (DID) method, and confirms that intelligent manufacturing has significant positive causal effects on Chinese manufacturing enterprises’ offshoring production. The reshoring effect of intelligent manufacturing is stronger than the offshoring effect, but its powerful productivity effect masks the reshoring effect in overall empirical results. The positive effects of intelligent manufacturing are more significant in non-state-owned enterprises (non-SOEs) and capital-intensive enterprises. Further considering host country selection for corporate offshoring, this study finds that intelligent manufacturing simultaneously promotes corporate offshoring production to both developed and developing countries, but enterprises prefer Belt and Road Initiative countries. Additionally, intelligent manufacturing also promotes corporate offshore trade activities while causing the reshoring of offshore R&D activities. Overall, the transition of production modes toward intelligent manufacturing in Chinese manufacturing enterprises generally leads to a further expansion of corporate offshoring production.

Keywords: intelligent manufacturing; offshoring production; task-based model; staggered DID; nonlinear DID (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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