The “Little Giant” qualification policy and SMEs’ digitalization: evidence from China

Purpose This study aims to examine whether the MIIT’s “Little Giant” qualification policy promotes the digital transformation and upgrading of SMEs. The authors explore the mechanisms through which the policy affects firms’ resource allocation, talent structure and entrepreneurial capabilities and investigate whether the policy impact varies under different supply chain resilience and intellectual property protection environments. The study aims to provide new insights into how targeted policy tools interact with SMEs’ market environments to support digitalization. Design/methodology/approach Using a sample of Chinese SMEs selected as “Little Giants,” the authors identify the causal impact of the policy on firms’ digital upgrading. The authors use econometric analyses to assess changes in resource constraints, specialized talent allocation and entrepreneurial activities. The authors further conduct heterogeneity tests based on supply chain–industrial chain resilience and regional intellectual property protection and examine the persistence and sustainability implications of the policy effect. Findings The results show that being awarded the “Little Giant” title significantly promotes SMEs’ digital transformation and upgrading. The policy alleviates firms’ resource constraints, enhances the allocation of specialized talents and strengthens entrepreneurial capabilities. The promotional effect is more pronounced for enterprises with stronger supply chain–industrial chain resilience and those operating in regions with higher levels of intellectual property protection. Additional analysis indicates that the positive impact of the policy is continuous and contributes to the sustainable growth potential of SMEs. Originality/value This study provides novel evidence on the real effects of a national-level qualification policy on SMEs’ digital transformation. By highlighting the interaction between policy tools and market environments, the findings enrich the understanding of policy-driven digital upgrading in developing economies. The study also offers practical implications for designing targeted policy instruments to support SMEs’ long-term digital and sustainable development.