Heterogeneous Effects of the Talent Competition on Urban Innovation in China: Evidence from Prefecture-Level Cities

Abstract

With in-depth efforts in the national strategy of innovation-driven development, the demand for talent in cities is burgeoning. Cities in China have released a large number of preferential policies to attract talent as these cities look to gain an edge in increasing talent competition. This study empirically studied the effect of talent competition on urban innovation using a panel data set of 298 prefectural-level cities in China from 2010 to 2019 based on the difference-in-difference model and an event study method. The results show that there are heterogeneous effects of talent competitions on urban innovation, which may widen the gap between urban innovation in different cities. The effect of talent competition in different cities showed a significant positive correlation with the level of urban development, and there is a “head effect” of talent competition on urban innovation. Moreover, the results of the mechanism analysis indicate that the effect of talent competition on urban innovation is mainly through talent flow. These findings can help policymakers formulate scientific and reasonable talent policies to promote the strategy of innovation-driven development.