Unlocking Informatization's Potential: The Impact of Smart City Initiatives on Inclusive Green Growth

ABSTRACT Sustainable cities are essential drivers of global social progress, but the effectiveness of smart city (SC) initiatives in fostering inclusive green growth (IGG) remains uncertain. This study assesses the impact of SC initiatives on IGG using data from 281 Chinese prefecture‐level cities from 2007 to 2020. We explore both the theoretical and empirical dimensions, focusing on the mechanisms through which SC pilot policies influence IGG. By treating the varied implementation of SC pilots as exogenous shocks and using a difference‐in‐difference (DID) framework combined with machine learning algorithms, we find a significant increase in IGG in cities that adopted SC pilots compared with those that did not. Our results highlight the critical role of SC initiatives in advancing IGG, which remains robust after rigorous robustness checks. The positive effects are primarily driven by three key pathways: enhancing financial inclusion, promoting industrial upgrading, and stimulating innovation. Notably, the impact is more pronounced in economically developed regions, particularly in the eastern part of China and in larger cities. However, the contribution of SC initiatives to IGG is less significant in smaller cities and in areas with weaker economic dynamism, particularly in the central and western regions. This study underscores the importance of SC initiatives in promoting IGG and offers new insights into the relationship between informatization and sustainable development.