Abstract
Science and technology innovation is the new driving force of urban development, and it is an important vehicle to promote financial development. Innovative city attaches importance to the driving role of science and technology innovation capacity on industry development in the construction process, which will drive the development of the city’s financial industry. This article takes China’s innovative city pilot policy as a quasinatural experiment and uses the panel data of 235 prefecture-level cities in China from 2005 to 2017 to construct a difference-in-differences model (DID) to investigate the net effect and mechanism of the policy implementation on the financial development level of pilot cities. The results show the following: (1) the construction of innovative cities has significantly improved the financial development level of pilot cities, and the conclusion is still valid through the robustness test; (2) the financial development level promotion effect of innovative city construction has regional heterogeneity, and the financial development level promotion effect of central cities is more significant; (3) the construction of innovative cities can improve the financial development level of pilot cities by improving the intermediary effect of scientific and technological talents gathering and industrial structure upgrading.
Highlights
In the process of economic globalization with increasingly fierce international competition, many countries take strengthening the national innovation system as a national strategy and the investment in scientific and technological innovation as a strategic investment so as to enhance the national innovation ability and enhance the international competitiveness. e work report of the Chinese Central Government in 2021 points out that one of the main goals and major tasks of China’s economic and social development during the “14th Five-Year Plan Period” is to uphold innovation-driven development, continue to adhere to the core position of innovation in China’s overall modernization drive, and maintain sustained and healthy economic development
(3) this article uses the intermediary effect model to analyze the mechanism of the role of innovative city construction on the financial development level. e results of the analysis show that the innovative city construction mainly improves the financial industry development by increasing the concentration of scientific and technological talents in the pilot cities and by promoting the advanced development of the city’s industry structure, which provides a theoretical and policy basis for our government to further summarize the pilot experience and continue to promote the construction of innovative cities and highquality financial development
Columns (4) to (6) show the results of the regressions with the inclusion of control variables. e results show that the coefficient of hsr is still significant at the 1% level after the inclusion of control variables, which indicates that innovative city construction can effectively improve the level of urban financial development
Summary
In the process of economic globalization with increasingly fierce international competition, many countries take strengthening the national innovation system as a national strategy and the investment in scientific and technological innovation as a strategic investment so as to enhance the national innovation ability and enhance the international competitiveness. e work report of the Chinese Central Government in 2021 points out that one of the main goals and major tasks of China’s economic and social development during the “14th Five-Year Plan Period” is to uphold innovation-driven development, continue to adhere to the core position of innovation in China’s overall modernization drive, and maintain sustained and healthy economic development. Li et al showed that the construction of innovative cities has led the government to provide support to innovation activities through innovation institutional reforms and the implementation of financial and tax incentives and other policies to improve the efficiency of the use of innovation factors in the city and enhance the development of sectors, such as finance [12]. Based on the above analysis, it can be seen that innovative city construction enhances financial development through the following four aspects: promoting the development of advanced industrial structure, triggering the gathering of talents, improving the quality of foreign investment, and strengthening government governance capacity. For China, it is important to explore whether the construction of innovative cities can enhance the level of financial development and to analyze the path of enhancement, in order to sustain the construction of innovative cities and promote high-quality economic development in China. erefore, this article proposes the following hypotheses, taking the pilot policy of innovative cities as the research object and combining with prior research
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