Abstract: Previous studies have regarded intellectualization as a kind of technological progress. In this paper, smart capital is introduced into Hsieh and Klenow’s (2009) model, and thus we extend our research on factor misallocation to the case of three factors. We find that smart capital can promote factor market competition and reduce the dispersion degree of revenue total factor productivity (TFP). Thus, it enhances TFP by improving resource allocation efficiency. Based on the manufacturing firm survey in Guangdong, the empirical results show that: (1) robot adoption is not random. The larger scale and higher repetitive labor intensity a firm has, the more likely it is to adopt robots; (2) by constructing matching samples and using PSM-DID weighted estimation, it is found that robots are productivity-enhancing, and they raise firm-level TFP of robot-adopting firms; (3) for non-adopters, with the increase of robots use density at industry-level, their output turns out to decrease passively. Therefore, non-adopters should actively adapt to intelligent transformation; and (4) heterogeneity analysis shows that the effect of intellectualization is different among samples with different sizes and ownership. Therefore, the basic findings of this paper are further verified.

Key words: intellectualization, eliminating misallocation, TFP, robots