The Effects of New Urbanization Pilot City Policies on Urban Innovation: Evidence from China

Abstract

The new urbanization city pilot policy is China’s most recent policy on urban urbanization. This paper uses new urbanization pilot policies as a quasi-natural experiment to empirically test the impact of new urbanization pilot policies on urban innovation through the difference-in-differences (DID) method using panel data from 199 cities in China from 2011 to 2019. The results show that: (1) The new urbanization city pilot policy has significantly enhanced urban innovation. (2) The theoretical mechanism test shows that the pilot policy of new urbanization promotes urban innovation through the level of human capital. (3) The results of the heterogeneity analysis show that the new urbanization pilot policies have obvious city-level heterogeneity and regional heterogeneity on the improvement of urban innovation levels. The impact effect of new urbanization pilot policies is higher in first-tier and second-tier cities than in fourth-tier and fifth-tier cities; the effect of new urbanization pilot policies is higher in western regions than in eastern and middle regions.