To read this content please select one of the options below:

National Innovation Demonstration Zone policy and city innovation capability – a quasi-natural experimental analysis

Gulizhaer Aisaiti (College of Business, Shanghai University of Finance and Economics, Shanghai, China) (School of Business Administration, Xinjiang University of Finance and Economics, Urumqi, China)
Jiaping Xie (College of Business, Shanghai University of Finance and Economics, Shanghai, China)
Tingting Zhang (College of Business, Shanghai University of Finance and Economics, Shanghai, China)

Industrial Management & Data Systems

ISSN: 0263-5577

Article publication date: 14 April 2022

Issue publication date: 16 May 2022

358

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

Copyright © 2022, Emerald Publishing Limited

Related articles