Research on World Agricultural Economy

Impact of Manufacturing Subsidies on Global Trade Competitiveness under Smart Finance

Zixin Liu

aSSIST University, Seoul 03767, South Korea

DOI: https://doi.org/10.36956/rwae.v7i2.2678

Received: 27 August 2025 | Revised: 6 December 2025 | Accepted: 12 December 2025 | Published Online: 23 June 2026

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Abstract

This study examines how intelligent finance transforms the transmission mechanism of manufacturing and agricultural subsidy policies in shaping national trade competitiveness. The analysis employs a sector-matched panel of 30 countries from 2018 to 2023, integrating UN Comtrade and WTO trade data, OECD subsidy accounts, and a composite intelligent-finance index that combines AI penetration with financial-institution investment. An agricultural coverage scalar, reflecting digital crop insurance and AI-based rural credit, extends the cross-sector comparison. The results from two-way fixed effects and robustness checks using RCA indices reveal that subsidies enhance trade competitiveness, while intelligent finance magnifies this effect through targeted allocation, digital monitoring, and precision in capital flow. The impact operates through three channels: technological innovation, production efficiency, and risk management. Manufacturing gains arise from R&D investment, robotization, and supply-chain resilience; agriculture benefits from digital insurance participation, technology adoption, and logistics reliability. Effects are stronger in economies with advanced digital finance systems and weaker where infrastructure or connectivity remains limited. Policy relevance lies in aligning with the OECD Green Growth Report (2024) and the WTO trade-distortion framework, which emphasize transparent, innovation-driven subsidy governance. Embedding intelligent finance into subsidy systems strengthens efficiency, accountability, and sustainability, advancing global competitiveness in both industrial products and agricultural commodities.

Keywords: Intelligent Finance; Subsidy Policy; Trade Competitiveness; Manufacturing; Agriculture; Digital Crop Insurance; Two‑Way Fixed Effects

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