ABSTRACT High-quality innovation (HQI) is a crucial contributor to economic development, technological progress, and competitive advantages. This study uses China’s National Civilized City (NCC) policy as a quasi-natural experiment. By applying the difference-in-difference (DID) method to a sample of 284 prefecture-level cities from 2003 to 2022, we test the impact of the NCC policy on urban innovation. Our findings demonstrate that an NCC award significantly enhances the quality of urban innovation in a city, increasing HQI by 19.14% and decreasing low-quality innovation (LQI) by 10.01%. This improvement is robust yet temporary, gradually diminishing over 5 years post-selection. Our mechanism analysis reveals that NCC awards boost HQI by increasing fiscal science expenditure, public cultural services, and human capital accumulation and inhibit LQI by optimizing the human capital structure. The impact of the NCC policy is heterogeneous across economic scales and regions; improvements in HQI are more pronounced in larger cities and eastern regions of China, and the inhibition of LQI is stronger in central and western regions of China. Our study provides empirical evidence of the promoting effects of NCC awards on the quality of innovation. These findings offer valuable insights for policymakers in innovation-driven development and regional coordination.
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