Does Innovative City Pilot Policy Stimulate the Chinese Regional Innovation: An Application of DID Model.

Abstract

Urban innovation has always been a research topic of scholars, but research focusing on the relationship between innovative city pilot policy and regional innovation is still relatively rare. The objective of this study is to examine the impact of the pilot policy on urban innovation convergence based on panel data in China from 2003 to 2016. The difference-in-differences (DID) method was used. First, we find that the pilot policy not only improves the innovation level of cities (basic effect) but also promotes innovation convergence among pilot cities (convergence effect). The convergence of scientific and technological personnel and financial technology investment are potential impact mechanisms. Second, compared with the basic effect, the convergence effect of the pilot policy has a time lag of three to five years. Regarding spatial spillover, the policy convergence effect is slightly smaller than the basic effect radius (although not robust). Finally, while the spillover effect caused by policy increases the innovation growth rate of surrounding cities more significantly, the basic and convergence effects are not significant in the western region. The results reveal the positive impact of the pilot policy on narrowing urban innovation gaps and highlight the risk of further marginalization of some cities. These findings contribute to accurately evaluating the regional innovation differences and provide an important policy implication for development strategy.