Description:
In China's steel industry, hot issues such as "merger and reorganization" and "zombie firms" are closely tied to firm exit. This paper studies the selection mechanism of steel firms from a perspective of advanced technology adoption. Intelligent manufacturing, as an advanced technology with growing popularity in China’s steel sector, is found to be able to increase the probability of firm survival. Using total factor productivity (TFP) as an intermediate, we first demonstrate a positive correlation between intelligent manufacturing and TFP by using firm-level data. Then we find TFP highly correlates with firm duration. Finally, a dynamic analysis reveals that intelligent transformation of steelmakers could help them escape from the edge of exit during output contraction in this sector