National Innovation Demonstration Zone policy and city innovation capability – a quasi-natural experimental analysis
Industrial Management & Data Systems
ISSN: 0263-5577
Article publication date: 14 April 2022
Issue publication date: 16 May 2022
Abstract
Purpose
This paper aims to understand the relationship between the National Innovation Demonstration Zone policy and city innovation capability and the underlying mechanisms.
Design/methodology/approach
This paper collects panel data of 283 Chinese cities from 2006 to 2018 for the quasi-natural experiment of National Independent Demonstration Zone (NIDZ) policy. It applies the difference-in-difference (DID) method to study the impact of NIDZ policy on city innovation capability and its underlying mechanism to enhance it.
Findings
The empirical result indicates that the establishment of NIDZ significantly enhances the city's innovation capability, which was verified through a series of robustness tests. The mechanism analysis shows that the NIDZ promote the inflow and outflow of knowledge, which implies NIDZ enhances the innovation capability of cities by facilitating the innovation sharing impact. Heterogeneity analysis indicates that the higher degree of digitalization, the higher the government service level induce a more favourable policy effect. The policy effect is more significant in the cities with a higher marketization or the eastern developed region.
Practical implications
This study’s empirical findings suggest that it is essential to improve the digital infrastructure to accomplish the digital transformation and upgrading of NIDZ. The government should improve the service efficiency and reshape the city market environment to ensure the fair competition of science and technology enterprises.
Originality/value
The paper first proposed and empirically tested that innovation sharing is an important mechanism that can significantly enhance the city innovation capability. The authors analyse the heterogeneity of NIDZ from four aspects: digitalization level, marketization level, government service level, and regional development and expanded research boundaries.
Keywords
Acknowledgements
Funding: This work was supported by the Major project of National Social Science Foundation of China (Grant No. 20&ZD060); Key Program of National Social Science Foundation of China (Grant No. 20AJY008); and Social Science Fund Project of Xinjiang Autonomous Region (Grant No. 21BGL109); and Shanghai University of Finance and Economics (Grant No. CXJJ-2021-402). The authors contributed equally to the paper and author names are in alphabetical order. The authors would also like to express appreciation to the anonymous reviewers and editors for their very helpful comments that improved the paper.
Citation
Aisaiti, G., Xie, J. and Zhang, T. (2022), "National Innovation Demonstration Zone policy and city innovation capability – a quasi-natural experimental analysis", Industrial Management & Data Systems, Vol. 122 No. 5, pp. 1246-1267. https://doi.org/10.1108/IMDS-12-2021-0772
Publisher
:Emerald Publishing Limited
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