How Resource-Exhausted Cities Get Out of the Innovation Bottom? Evidence from China

Abstract

The transformation and upgrading of resource-exhausted cities are crucial for regional sustainable development, but how to help them overcome innovation challenges remains to be explored. Based on data from 2003 to 2016, this study used a difference-in-differences (DID) method to examine the impact of China’s support policy for resource-exhausted cities on urban innovation and tests for long-term mechanisms. The results indicate that the support policy significantly enhanced regional innovation levels. The mechanism tests showed that these policies promoted urban innovation through long-term mechanisms of increasing marketization and upgrading industrial structures. Further analysis revealed that the innovation-promoting effects of the policies were more significant in resource-exhausted cities located in the eastern region, those not dependent on coal, those with a low reliance on extractive industries, and those with a favorable talent environment. The findings suggest that the government should provide policy support to achieve the transformation, upgrading, and sustainable development of resource-exhausted cities through urban innovation.