Promoting Urban Innovation through Smart Cities: Evidence from a Quasi-Natural Experiment in China

Abstract

It is of great theoretical and practical significance to investigate the influence of intelligent city construction on urban innovation. Based on the data of 238 cities in China from 2006 to 2019, this paper utilizes the staggered difference-in-differences (staggered DID) model and the mediating effect model to examine the impact and mechanisms of smart city construction on urban innovation. We find that China’s smart city pilot policies significantly promote urban innovation. Mechanism analysis shows that this innovation promotion effect acts through improving urban informatization, government financial expenditure on science and technology, and the upgrading of the city’s industrial structure. Further analysis shows that smart city construction has a stronger promoting effect on innovation in cities of a larger scale, that located in the eastern region, and have a lower level of science and education. Overall, our findings provide new insights into urban innovation and objectively assess the impact of smart city construction in China.