Government intervention, spillover effect and urban innovation performance: Empirical evidence from national innovative city pilot policy in China

Abstract

Recently, research on government intervention and innovation performance has emerged in large numbers. However, the endogenous problems arising from the indirect investigations make the results open to discussion. Against this background, this study uncovers the impacts of innovation intervention represented by the national innovative city pilot (NICP) on urban innovation performance and innovation convergence within the causal inference framework considering the policy spillover effect. Results reveal that NICP has a long-term positive effect on innovation performance in local and surrounding areas, while the spillover effect only exists in cities within the provinces and geographical neighboring cities in surrounding provinces, and conforms to the distance attenuation law. Moreover, the positive impacts of NICP on innovation performance in local and neighboring cities continue to be amplified as the quantiles of innovation performance increase. Not only that, NICP plays a positive role in accelerating innovation convergence across cities, resulting from the yardstick competition of fiscal expenditures on science and technology and the spatial knowledge spillover, and low-level innovation club has a stronger late-mover advantage in innovation convergence. These findings contribute to accurately evaluating the innovation benefits of expanding NICP networks and provide an important reference for innovation-driven development strategy.