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Place-based techno-industrial policy and innovation: Government responses to the information revolution in China

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  • Liu, Changqing
  • Li, Lei

Abstract

This paper examines the impact of pilot zones for integrating informatization and industrialization (PZIIs), a novel place-based techno-industrial policy for innovation. Combining quality-adjusted invention patent data, we find that PZIIs have a significant and positive impact on urban innovation. Direct or indirect government support plays a vital role in mediating policy effects. The higher the government's fiscal self-sufficiency rate, or the more economic resources it has, the stronger the policy effects. Moreover, policy effects are amplified in pilot zones that incorporate PZII performance into local government performance assessments and span multiple prefectural administrative units. Indirect government support is reflected in the promotion of market-oriented reforms. Policy effects are greater in pilot zones with a higher degree of marketization. Further, based on firm data, we show that PZIIs effectively guide firms to increase R&D investment, indicating that PZIIs create innovation incentives. Our paper facilitates understanding the role of government in accelerating the penetration of new technology into industrial upgrades.

Suggested Citation

  • Liu, Changqing & Li, Lei, 2021. "Place-based techno-industrial policy and innovation: Government responses to the information revolution in China," China Economic Review, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:chieco:v:66:y:2021:i:c:s1043951x21000183
    DOI: 10.1016/j.chieco.2021.101600
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    2. Weijiang Liu & Tingting Liu, 2022. "Exploring the Impact and Path of Environmental Protection Tax on Different Air Pollutant Emissions," IJERPH, MDPI, vol. 19(8), pages 1-14, April.
    3. Li, Ping & Zhang, ZhongXiang, 2023. "The effects of new energy vehicle subsidies on air quality: Evidence from China," Energy Economics, Elsevier, vol. 120(C).
    4. Mustafa Kiziltan & Ahmet Burcin Yereli, 2023. "Evaluating local fiscal capacity and fiscal effort of Turkish local governments: Evidence from spatial panel data analysis," Economic Change and Restructuring, Springer, vol. 56(1), pages 441-472, February.
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    6. Ali Cheshmehzangi & Tong Zou, 2024. "Literary Analysis of the Connection between Urban Innovations and Sustainable Development Goals (SDGs)," Sustainability, MDPI, vol. 16(15), pages 1-26, July.
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    8. Xiong, Jiacai & Huang, Ling & Yang, Zelin & Wang, Xin, 2024. "The impact of local government debt on entrepreneurship: Evidence from a quasi-natural experiment of local debt governance reform," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 501-519.
    9. Na Yu & Chunfeng Zhao, 2021. "Chain Innovation Mechanism of the Manufacturing Industry in the Yangtze River Delta of China Based on Evolutionary Game," Sustainability, MDPI, vol. 13(17), pages 1-20, August.
    10. Jun, Xiao & Ai, Junwei & Zheng, Lingfeng & Lu, Meiting & Wang, Jianye, 2024. "Impact of information technology and industrial development on corporate ESG practices: Evidence from a pilot program in China," Economic Modelling, Elsevier, vol. 139(C).
    11. Bingqiang Li & Shan Wang & Nannan Dong & Jinzhi Li & Xi Li & He Yu, 2023. "Empirical Analysis of Subsidy Industrial Policy’s Effect on Export Innovation in the Chinese Manufacturing," SAGE Open, , vol. 13(4), pages 21582440231, November.

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    More about this item

    Keywords

    Place-based policy; Information technology; Innovation; Difference-in-differences;
    All these keywords.

    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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