Search results

A city is a spatial carrier of innovation activities. Improving the level of urban innovation can play a significant supporting role in building an innovative country. China began to implement the innovative city pilot policy in 2008 and continued to expand the policy into more areas for exploring the path of innovative urban development with Chinese characteristics and improving urban innovation.

Based on mechanism analysis, this paper used the panel data of 269 cities from 2003 to 2016 to empirically test the effect of the pilot policy on the level of urban innovation by using different methods, such as the difference-in-differences model.

The results show that the innovative city pilot policy significantly improves the level of urban innovation. However, according to the findings of the heterogeneity analysis, the effect of the pilot policy on improving the innovation level in direct-controlled municipalities, provincial capitals and sub-provincial cities is weaker than that in ordinary cities, and the effect of the pilot policy on improving the innovation level in cities with a higher quality of science and education resources is weaker than that in cities with lower quality of science and education resources.

Moreover, as the level of urban innovation increases, the effect of the pilot policy on improving the level of urban innovation is an asymmetric inverted V shape, which means the effect is first strengthened and then weakened. The research also finds that the locational heterogeneity of the pilot policy for improving the level of urban innovation is not notable. In addition, the innovative city pilot policy can strengthen the government's strategic guidance, promote the concentration of talent, incentivize corporate investment and optimize the innovation environment, having a positive impact on urban innovation. Moreover, the effect of concentration of talent and the effect of corporate investment incentive are the important reasons for the pilot policy to promote the improvement of the level of urban innovation.

The relationship between government and market is the key to the economic development performance of market economy countries. Due to the limits such as the state/market dichotomy, the focus on static allocation efficiency and the ignorance of the diversity of the market economy and the relationship between government and market, economic liberalism and state interventionism can hardly position and explain the role and evolution of government and market in the real world accurately.

China’s economic transition has always adhered to the reform direction of the socialist market economy and the development goal of a modern socialist country as well as the symbiosis and positive and progressive evolution of government and market, blazing a “third way” in handling the relationship between government and market.

The “China’s experience” shows that the key for emerging market economies to achieve good economic development performance lies in whether they can build a new relationship of the mutual integration between and common prosperity of government and market regarding target selection, production organisation, technological innovation, institutional change and regulatory adjustment.

The second part of this paper analyses the inherent defects of economic liberalism and state interventionism as well as the reasons why they can hardly be adopted as the theoretical guidance for emerging market economies to handle the relationship between government and market. The third part analyses how China has transcended the inherent thinking of liberalism and interventionism and shaped the new relationship between government and market through goal-oriented, active and progressive, two-way interactive exploration and practice to ensure the success of China's economic transition.