IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v86y2024ics1043951x24000920.html
   My bibliography  Save this article

Innovation Like China: Evidence from Chinese Local Officials' Promotions

Author

Listed:
  • Chen, Bochao
  • Wang, Hang
  • Wang, Xianbin

Abstract

We investigate how cadre incentives within political organizations affect innovation activities in China. Analyzing prefecture-level data between 2006 and 2015, we find that prefecture-level mayors are more likely to be promoted in regions with a strong innovation performance, as indicated by the number of patents, especially in prefectures with strict innovation evaluations. We also identify inter-jurisdictional competition among local governments in the field of technological innovation, which is reflected in competition over the number of patents. We show that this competition effect holds after controlling for knowledge spillover effects. Our study highlights the important role of political incentives of government officials in promoting innovation in developing countries.

Suggested Citation

  • Chen, Bochao & Wang, Hang & Wang, Xianbin, 2024. "Innovation Like China: Evidence from Chinese Local Officials' Promotions," China Economic Review, Elsevier, vol. 86(C).
  • Handle: RePEc:eee:chieco:v:86:y:2024:i:c:s1043951x24000920
    DOI: 10.1016/j.chieco.2024.102203
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X24000920
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.chieco.2024.102203?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Anping Chen & Marlon Boarnet & Mark Partridge & Yongzheng Liu & Jorge Martinez-Vazquez, 2014. "Interjurisdictional Tax Competition In China," Journal of Regional Science, Wiley Blackwell, vol. 54(4), pages 606-628, September.
    2. Chen, Ye & Li, Hongbin & Zhou, Li-An, 2005. "Relative performance evaluation and the turnover of provincial leaders in China," Economics Letters, Elsevier, vol. 88(3), pages 421-425, September.
    3. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    4. Ufuk Akcigit & Douglas Hanley & Nicolas Serrano-Velarde, 2021. "Back to Basics: Basic Research Spillovers, Innovation Policy, and Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(1), pages 1-43.
    5. Lü, Xiaobo & Landry, Pierre F., 2014. "Show Me the Money: Interjurisdiction Political Competition and Fiscal Extraction in China," American Political Science Review, Cambridge University Press, vol. 108(3), pages 706-722, August.
    6. Junyan Jiang, 2018. "Making Bureaucracy Work: Patronage Networks, Performance Incentives, and Economic Development in China," American Journal of Political Science, John Wiley & Sons, vol. 62(4), pages 982-999, October.
    7. Zheng, Siqi & Kahn, Matthew E. & Sun, Weizeng & Luo, Danglun, 2014. "Incentives for China's urban mayors to mitigate pollution externalities: The role of the central government and public environmentalism," Regional Science and Urban Economics, Elsevier, vol. 47(C), pages 61-71.
    8. Liu, Dayong & Xu, Chunfa & Yu, Yongze & Rong, Kaijian & Zhang, Junyan, 2020. "Economic growth target, distortion of public expenditure and business cycle in China," China Economic Review, Elsevier, vol. 63(C).
    9. Ufuk Akcigit & John Grigsby & Tom Nicholas & Stefanie Stantcheva, 2022. "Taxation and Innovation in the Twentieth Century," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(1), pages 329-385.
    10. Matthew E. Kahn & Pei Li & Daxuan Zhao, 2015. "Water Pollution Progress at Borders: The Role of Changes in China's Political Promotion Incentives," American Economic Journal: Economic Policy, American Economic Association, vol. 7(4), pages 223-242, November.
    11. Gill,Indermit S. & Kharas,Homi, 2015. "The middle-income trap turns ten," Policy Research Working Paper Series 7403, The World Bank.
    12. Raymond Fisman & Jing Shi & Yongxiang Wang & Weixing Wu, 2020. "Social Ties and the Selection of China's Political Elite," American Economic Review, American Economic Association, vol. 110(6), pages 1752-1781, June.
    13. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    14. Guo, Di & Guo, Yan & Jiang, Kun, 2016. "Government-subsidized R&D and firm innovation: Evidence from China," Research Policy, Elsevier, vol. 45(6), pages 1129-1144.
    15. Chen, Xiude & Qin, Quande & Wei, Y.-M., 2016. "Energy productivity and Chinese local officials’ promotions: Evidence from provincial governors," Energy Policy, Elsevier, vol. 95(C), pages 103-112.
    16. Jing Wu & Yongheng Deng & Jun Huang & Randall Morck & Bernard Yeung, 2013. "Incentives and Outcomes: China's Environmental Policy," NBER Working Papers 18754, National Bureau of Economic Research, Inc.
    17. Raphaël Parchet, 2019. "Are Local Tax Rates Strategic Complements or Strategic Substitutes?," American Economic Journal: Economic Policy, American Economic Association, vol. 11(2), pages 189-224, May.
    18. Wang, Zhaoguang & Yao, Yang & Zhang, Junni, 2022. "The competence-loyalty tradeoff in China's political selection," Journal of Comparative Economics, Elsevier, vol. 50(2), pages 369-393.
    19. Michael König & Kjetil Storesletten & Zheng Song & Fabrizio Zilibotti, 2022. "From Imitation to Innovation: Where Is All That Chinese R&D Going?," Econometrica, Econometric Society, vol. 90(4), pages 1615-1654, July.
    20. Tang, Pengcheng & Jiang, Qisheng & Mi, Lili, 2021. "One-vote veto: The threshold effect of environmental pollution in China's economic promotion tournament," Ecological Economics, Elsevier, vol. 185(C).
    21. Xing Li & Chong Liu & Xi Weng & Li-An Zhou, 2019. "Target Setting in Tournaments: Theory and Evidence from China," The Economic Journal, Royal Economic Society, vol. 129(623), pages 2888-2915.
    22. Shi, Xiangyu & Xi, Tianyang, 2018. "Race to safety: Political competition, neighborhood effects, and coal mine deaths in China," Journal of Development Economics, Elsevier, vol. 131(C), pages 79-95.
    23. Atella, Vincenzo & Belotti, Federico & Depalo, Domenico & Piano Mortari, Andrea, 2014. "Measuring spatial effects in the presence of institutional constraints: The case of Italian Local Health Authority expenditure," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 232-241.
    24. Ufuk Akcigit, 2017. "Economic Growth: The Past, the Present, and the Future," Journal of Political Economy, University of Chicago Press, vol. 125(6), pages 1736-1747.
    25. Dang, Jianwei & Motohashi, Kazuyuki, 2015. "Patent statistics: A good indicator for innovation in China? Patent subsidy program impacts on patent quality," China Economic Review, Elsevier, vol. 35(C), pages 137-155.
    26. Wu, Mingqin & Cao, Xun, 2021. "Greening the career incentive structure for local officials in China: Does less pollution increase the chances of promotion for Chinese local leaders?," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    27. Chenggang Xu, 2011. "The Fundamental Institutions of China's Reforms and Development," Journal of Economic Literature, American Economic Association, vol. 49(4), pages 1076-1151, December.
    28. repec:oup:econjl:v:129:y:2019:i:10:p:2888-2915. is not listed on IDEAS
    29. Yang Yao & Muyang Zhang, 2015. "Subnational leaders and economic growth: evidence from Chinese cities," Journal of Economic Growth, Springer, vol. 20(4), pages 405-436, December.
    30. Wang, Bin & Zheng, Yu, 2020. "A model of tournament incentives with corruption," Journal of Comparative Economics, Elsevier, vol. 48(1), pages 182-197.
    31. Fabrizio Zilibotti, 2017. "Growing and Slowing Down Like China," Journal of the European Economic Association, European Economic Association, vol. 15(5), pages 943-988.
    32. Hu, Albert Guangzhou & Jefferson, Gary H., 2009. "A great wall of patents: What is behind China's recent patent explosion?," Journal of Development Economics, Elsevier, vol. 90(1), pages 57-68, September.
    33. Ruixue Jia & Masayuki Kudamatsu & David Seim, 2015. "Political Selection In China: The Complementary Roles Of Connections And Performance," Journal of the European Economic Association, European Economic Association, vol. 13(4), pages 631-668, August.
    34. Yu, Jihai & Zhou, Li-An & Zhu, Guozhong, 2016. "Strategic interaction in political competition: Evidence from spatial effects across Chinese cities," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 23-37.
    35. Aizer, Anna & Currie, Janet, 2004. "Networks or neighborhoods? Correlations in the use of publicly-funded maternity care in California," Journal of Public Economics, Elsevier, vol. 88(12), pages 2573-2585, December.
    36. Jiang, Junyan & Zhang, Muyang, 2020. "Friends with benefits: Patronage networks and distributive politics in China," Journal of Public Economics, Elsevier, vol. 184(C).
    37. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
    38. Philippe Aghion & Ufuk Akcigit & Peter Howitt, 2015. "Lessons from Schumpeterian Growth Theory," American Economic Review, American Economic Association, vol. 105(5), pages 94-99, May.
    39. Xi, Tianyang & Yao, Yang & Zhang, Muyang, 2018. "Capability and opportunism: Evidence from city officials in China," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 1046-1061.
    40. Guojun He & Shaoda Wang & Bing Zhang, 2020. "Watering Down Environmental Regulation in China," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 2135-2185.
    41. Hu, Albert G.Z. & Zhang, Peng & Zhao, Lijing, 2017. "China as number one? Evidence from China's most recent patenting surge," Journal of Development Economics, Elsevier, vol. 124(C), pages 107-119.
    42. Fredriksson, Per G. & Millimet, Daniel L., 2002. "Strategic Interaction and the Determination of Environmental Policy across U.S. States," Journal of Urban Economics, Elsevier, vol. 51(1), pages 101-122, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xue, Chang & Zhang, Xiaoyu, 2024. "Gloomy future, gloomy sky: Promotion incentives and pollution in China," European Journal of Political Economy, Elsevier, vol. 81(C).
    2. Tang, Pengcheng & Jiang, Qisheng & Mi, Lili, 2021. "One-vote veto: The threshold effect of environmental pollution in China's economic promotion tournament," Ecological Economics, Elsevier, vol. 185(C).
    3. Liu, Yongzheng & Zhang, Xiaoge, 2023. "Environmental regulation, political incentives, and mortality in China," European Journal of Political Economy, Elsevier, vol. 78(C).
    4. Shiyu Bo, 2021. "Environmental Regulations, Political Incentives and Local Economic Activities: Evidence from China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(3), pages 812-835, June.
    5. Jiang, Qisheng & Tang, Pengcheng, 2023. "All roads lead to Rome? Carbon emissions, pollutant emissions and local officials’ political promotion in China," Energy Policy, Elsevier, vol. 181(C).
    6. Shi, Xiangyu & Xi, Tianyang, 2018. "Race to safety: Political competition, neighborhood effects, and coal mine deaths in China," Journal of Development Economics, Elsevier, vol. 131(C), pages 79-95.
    7. Jianxin Wu & Ziwei Feng & Chunbo Ma, 2024. "Promotion Incentives and Environmental Regulation: Evidence from China’s Environmental One-Vote Veto Evaluation Regime," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(1), pages 257-286, January.
    8. Chen, Shuo & Qiao, Xue & Zhu, Zhitao, 2021. "Chasing or cheating? Theory and evidence on China's GDP manipulation," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 657-671.
    9. Wang, Jiayi & Lei, Ping, 2021. "The tournament of Chinese environmental protection: Strong or weak competition?," Ecological Economics, Elsevier, vol. 181(C).
    10. Wu, Mingqin & Cao, Xun, 2021. "Greening the career incentive structure for local officials in China: Does less pollution increase the chances of promotion for Chinese local leaders?," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    11. Yu Bai & Yanjun Li, 2022. "Political tournaments and regional growth‐enhancing policies: Evidence from Chinese prefectures," Journal of Regional Science, Wiley Blackwell, vol. 62(5), pages 1358-1385, November.
    12. Chen, Jidong & Shi, Xinzheng & Zhang, Ming-ang & Zhang, Sihan, 2024. "Centralization of environmental administration and air pollution: Evidence from China," Journal of Environmental Economics and Management, Elsevier, vol. 126(C).
    13. Yu, Jihai & Zhou, Li-An & Zhu, Guozhong, 2016. "Strategic interaction in political competition: Evidence from spatial effects across Chinese cities," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 23-37.
    14. Fugang Gao & Huub Ploegmakers & Erwin van der Krabben & Xiaoping Shi, 2022. "Impacts of the political incentive for environmental protection on industrial land supply: Evidence from the cadre evaluation system reform in China," Papers in Regional Science, Wiley Blackwell, vol. 101(4), pages 1001-1025, August.
    15. Cong Yu & Linke Hou & Yuxia Lyu & Qi Zhang, 2022. "Political competition, spatial interactions, and default risk of local government debts in China," Papers in Regional Science, Wiley Blackwell, vol. 101(3), pages 717-743, June.
    16. Liu, Yuanyuan & Liu, Guanchun & Zhang, Chengsi, 2021. "Local land supply and fiscal incentives for R&D: Evidence from a quasi-natural experiment in China," China Economic Review, Elsevier, vol. 68(C).
    17. Cheng, Maoyong & Meng, Yu & Zhang, Muyang, 2024. "Blessing or bane: The absence of a leader, political selection, and economic growth," Journal of Economic Behavior & Organization, Elsevier, vol. 227(C).
    18. Cheng, Cheng & Huang, Bo & Wang, Yiqian & Hu, Lei, 2024. "Military background officials, risk awareness, and local government fiscal balance: Novel evidence from text analysis of Chinese local officials' news reports," China Economic Review, Elsevier, vol. 85(C).
    19. Hongji Xie & Cunzhi Tian & Fangying Pang, 2023. "Multi-Tasking Policy Coordination and Corporate Environmental Performance: Evidence from China," IJERPH, MDPI, vol. 20(2), pages 1-22, January.
    20. Jiang, Xiandeng & Kong, Dongming & Xiao, Chengrui, 2020. "Policy certainty and heterogeneous firm innovation: Evidence from China," China Economic Review, Elsevier, vol. 63(C).

    More about this item

    Keywords

    Promotion tournament; Innovation performance; Horizontal competition;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:86:y:2024:i:c:s1043951x24000920. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/chieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.