Literature review
Government policies and innovation activities
At present, the world situation is complex and changeable. STI has become an important means for countries to overcome development bottlenecks and strengthen their advantages in development10,11.Consequently, issues such as the impact of government behaviour on STI activities and the effectiveness of government innovation policies have triggered extensive discussions in academic, policy-making, and grassroots practice circles12,13,14, and a series of constructive achievements have been made15,16. Some studies have found that the appropriate participation of the government in STI activities can, to a certain extent, rectify the shortcomings of the market mechanism, guide the innovation behaviours of cities and enterprises, and allocate innovation resources more effectively17,18. In addition, government financial subsidies can ease the financing constraints faced by enterprises in their development, promote enterprise capital deepening, guide enterprise innovation behaviours, and improve innovation efficiency19,20. However, other studies have shown that government participation does not significantly promote innovation activities21,22. Sometimes, it may even have a negative impact, resulting in a loss of innovation efficiency23,24. The innovation behaviours of enterprises under government subsidies may merely be strategic. Therefore, government subsidies result in more of an expansion of the enterprise innovation scale rather than an improvement in innovation efficiency25. Some research based on principal–agent theory, crowding–out theory, information asymmetry theory, and other theories26,27shows that government subsidies suppress enterprise innovation incentives, crowd out enterprise R&D expenditures, and inhibit improvements in enterprise, industry, or city innovation levels28. There are still obvious differences in existing research on issues such as whether the government should participate in innovation activities and the effectiveness of government innovation policies.
Evaluation of the effectiveness of the NIIDZ policy
Following the implementation of the NIIDZ pilot policy, the issue of appraising its impacts has attracted the attention of many scholars29,30,31. Lan et al. (2022) found that the NIIDZ policy increases innovation in cities and that such policies are more effective in cities with poorer economic development and at increasingly lower levels32. Aisaiti et al. (2022) found that NIIDZs significantly increase the innovation capacity of their host cities by facilitating the flow of knowledge and the sharing of innovations and that this effect is more pronounced in cities with better public services and marketization and higher levels of digitization33. Liu et al. (2022) provided new empirical evidence on the policy effects of NIIDZs in terms of urban haze pollution governance34. They found that NIIDZ policies significantly contribute to the governance of urban haze pollution, with the promotion of high-tech firm clustering and the enhancement of a city’s innovation capacity playing a positive role. Yu et al. (2023) found that NIIDZs effectively enhance a city’s green total factor productivity and that talent pooling and local fiscal science and technology expenditures are essential paths through which NIIDZ policy promotes the city’s green total factor productivity35. Several scholars have empirically analysed the impact of NIIDZs on micro innovation subjects. Wei et al. (2023) selected 911 firms within the Shanghai Zhangjiang NIIDZ and 861 firms outside the park, applied the zero-inflated negative binomial model to analyse the difference in innovation performance between firms inside and outside the park and found that firms in the park presented significantly higher levels of innovation performance than did firms outside the park36. Unfortunately, this study did not conduct a more in-depth exploration of the mechanism through which the NIIDZ influences the innovation performance of firms in parks.
A review of the literature indicates that the current research on the effects of NIIDZ policies is still limited. First, although some studies have explored the effects of NIIDZ policies, few articles have examined the impact of NIIDZ policies on urban STI efficiency, which is not commensurate with the objective requirements of the in-depth advancement of China’s innovation-driven strategy at the present time. Second, there is still a lack of research on the main factors and mechanisms that should be considered in analysing the impact of NIIDZ policies on urban STI efficiency, which results in the limited scientific evidence provided by existing studies with respect to guiding the government to formulate and improve relevant policies. Therefore, a systematic assessment of the role of NIIDZs in promoting urban STI efficiency and its internal mechanism is the main goal of this study.
Research hypotheses
Existing theoretical studies and empirical analysis results indicate that the implementation effects of location-oriented policies exhibit strong heterogeneity37,38. Moreover, the implementation effects of location-oriented policies are influenced by a series of external environmental factors, such as residents’ preferences for their commuting and living patterns. The theoretical analysis by Busso et al. (2013) shows that if residents have completely identical preferences, location-oriented policies will lead to substantial net losses in social welfare39. The research findings of Austin et al. (2018), on the other hand, reveal that during the implementation of location-oriented policies, the subsidies provided by the government are capitalized into land rent, thus causing an increase in land rent or housing prices40. In this case, the greatest beneficiaries are not low-income groups but land or housing owners within the target area. Additionally, factors such as geographical location and city size affect the implementation effects of location-oriented policies41,42. For NIIDZ policy, the heterogeneity of its driving effect on improvements in urban STI efficiency is manifested mainly in the construction mode, city size, STI efficiency, and time dimensions.
In terms of the construction mode, there are significant differences in the methods of resource integration and allocation among different construction modes. By virtue of the resource integration advantages of multiple cities, NIIDZs that rely on urban agglomerations can achieve efficient cross-regional flow and the sharing of innovative elements. Each city can carry out a division of labour and cooperation based on its own industrial characteristics to form a complete innovative industrial chain. However, it may also encounter obstacles in the integration of cross-regional innovative resources and policy coordination, resulting in the weakening of policy effects. For NIIDZs that rely on a single city, the formulation and implementation of policies are relatively flexible. However, the radiation scope is limited, and the policy effects are more confined to local areas, with a weak driving effect on the surrounding regions, making it difficult to form a pattern of regional collaborative innovation and development. Such differences lead to variations in the agglomeration efficiency of innovative elements and the degree of refinement of the innovation ecosystem, which in turn affects the role of policies in enhancing urban STI efficiency.
In terms of the city size dimension, large cities possess innate advantages in terms of innovative resources due to their abundant talent reserves, substantial financial strength, and dense scientific research institutions. After the NIIDZ policy is implemented, an NIIDZ can rapidly form innovative clusters with deep integration of industry, academia, and research, generating significant scale effects and synergistic effects. From another perspective, the gaps in human capital and innovative resources in large cities are relatively small or even saturated. Therefore, the establishment of an NIIDZ may have an insignificant marginal effect on this type of city. In contrast, small and medium-sized cities are at a disadvantage in terms of both the quantity and quality of innovative resources. Moreover, their weak industrial support capabilities make it difficult to support the large-scale industrial application of STI achievements, resulting in a limited increase in the urban STI efficiency brought about by the policy.
In terms of the dimension of STI efficiency, when the STI efficiency of a city itself is low, it often indicates significant gaps in aspects such as the accumulation of innovative resources and the construction of the innovation system. At this time, the NIIDZ policy functions similarly to a “cardiotonic”, which can quickly fill these shortfalls by introducing external innovative resources, optimizing the innovation environment, and improving the innovation service system.
As the STI efficiency of a city gradually improves, the city achieves a certain scale of innovative resources and forms a relatively complete innovation system. On the one hand, the path dependence of the original innovation system restricts the implementation effect of new policies, making it difficult for the innovative elements promoted by the policies to quickly integrate into the existing system and play their roles. On the other hand, when the STI of the city reaches a relatively high level, further improvement becomes more difficult, and the marginal return created by the policy investment decreases, resulting in a gradual weakening of the driving effect of NIIDZs on STI efficiency.
In terms of the time dimension, the driving effect of NIIDZs on urban STI efficiency shows strong heterogeneity at different time points after their establishment. According to the existing empirical evidence, the policy effects of the same location-oriented policy vary greatly at different time points. For example, in their study of the French enterprise free zone policy, Mayer et al. (2012), found that the impact of this policy on employment was significant only in the short term43. NIIDZ policies aim to improve STI efficiency through innovative reforms of institutional mechanisms such as encouraging innovation and entrepreneurship, equity incentives, and the integrated development of the science and technology finance industry. However, since the formulation and implementation of STI policies is a relatively systematic process, the policy effects become evident only when the policies are comprehensively and deeply implemented. Therefore, there may be a certain time lag in the effects of NIIDZ policies. As the reform of the institutional mechanisms underlying STI continues to deepen, NIIDZ policy effects may exhibit more obvious characteristics of heterogeneity.
Hypothesis 1
In the process of NIIDZ policies taking effect, due to differences in resource endowments and other factors among various regions, the policy effects of the innovative city pilot program are heterogeneous in terms of the construction mode, city size, STI efficiency, and time dimension. Theoretically, the intrinsic mechanism through which NIIDZs affect urban STI efficiency is reflected in the following three main aspects.
Factor agglomeration effects. According to signalling theory44, as crucial carriers of China’s STI activities, NIIDZs convey effective information on their strategic goals and development priorities to potential investors in the initial stage of construction, thereby spurring the aggregation of venture investors, high-tech enterprises, and STI talent. On the one hand, high-tech enterprises and their closely related supporting enterprises form multiple industrial chains and supply chains. These chains not only reduce transportation costs and shorten the transportation time but also enable downstream enterprises in the industrial chain to be the first to receive and transform the STI achievements of upstream enterprises, thus generating innovation outputs. On the other hand, downstream enterprises in the same city that have not settled in the NIIDZ are also more likely to receive and transform the innovation achievements of enterprises within the NIIDZ because of the agglomeration effect of NIIDZs. These enterprises can improve their own STI efficiency and further promote the improvement of the overall STI efficiency of the city. Innovation environment optimization effect. The effect of innovation environment optimization is remarkable. First, NIIDZs and local governments have introduced policies to support infrastructure construction, promote the construction of new infrastructure in cities and parks, focus on technological and application requirements, and drive the innovative development of information technologies such as the internet, big data, cloud computing, blockchain, and artificial intelligence. These policies therefore promote the in-depth integration of these technologies with enterprise demands, creating a “new engine” for STI.
Second, the establishment of NIIDZs has increased the attention of local city governments to innovation activities and advanced improvements in the intellectual property protection system. For example, Shenzhen in China took the lead in establishing a comprehensive intellectual property protection system with judicial protection as the mainstay, administrative protection as a support, and industry self-discipline, social supervision, arbitration, and mediation as supplements. This system effectively safeguards STI activities. Third, creating a market-oriented and law-based business environment is a key aspect of NIIDZ construction. Improving the level of marketization can foster a fair and vibrant competitive environment, protect the spirit of entrepreneurship, and stimulate the enthusiasm of innovation entities45. During this process, local governments pay more attention to constructing a market-centred resource allocation mechanism. This focus not only promotes the flow of innovation factors but also attracts high-quality innovation factors to agglomerate around NIIDZs, further enhancing the STI efficiency of cities.
Industrial structure transformation and the upgrading effect. First, NIIDZs are supported by high-tech industries. NIIDZs constantly transform traditional industries and spawn new industries while promoting the development and expansion of high-tech industries, which can drive the evolution of local industries from primary to secondary and tertiary industries at the aggregate level and is conducive to increasing the ” quality ” of the industrial structure46. Second, at the beginning of its establishment, an NIIDZ clearly defines the target industries that are the focus, which provides a clear guide for the subsequent development of the park in terms of industry selection. This approach largely circumvents the blind investment and overproduction behaviour of industries in the development process, reduces the friction resulting from irrational changes in the industrial structure, and lowers the cost of replacing factors. Finally, the externality of technological innovation diffusion within the NIIDZ strengthens the spatial association between parks and neighbouring cities, accelerates the diffusion and allocation of factors within the spatial scope, and synergistically transforms and upgrades the industrial structure, thus improving urban STI efficiency. Based on the above theoretical analysis, we propose the following hypotheses:
Hypothesis 2
The establishment of an NIIDZ enhances STI efficiency in the host city through the three paths of innovation factor agglomeration, innovation environment optimization, and industrial structure transformation and upgrading.
NIIDZs have been making continuous efforts to optimize the institutional environment and strengthen infrastructure construction by building a sound innovation ecosystem, which effectively reduces the enterprise transaction costs. On the other hand, leveraging informatization and networking construction within a city improves the efficiency of resource allocation, enabling flexible scheduling and efficient integration of production factors such as scientific and technological resources and high-tech labour forces among cities. Therefore, NIIDZs can not only enhance the innovation capabilities of pilot cities but also promote the two-way flow of innovative elements across regions through the spillover effect of policy dividends. Nonpilot cities can take advantage of the policy strengths of NIIDZ cities to obtain advanced technologies, innovative concepts, and high-level talents, effectively achieving the cross-regional sharing of innovative resources. This flow and sharing of resources have a significant spatial spillover effect on neighbouring regions, effectively enhancing the innovation vitality and competitiveness of surrounding cities and driving the coordinated development of regional innovation.
The driving effect of NIIDZs urban STI efficiency exhibits heterogeneous characteristics as the distance from NIIDZs increases. First, the flow and orderly allocation of innovative elements lead to the agglomeration of elements and the transformation and upgrading of the industrial structure. Owing to the existence of agglomeration externalities, cities where NIIDZs are located experience the most positive agglomeration externalities. However, the spillover effect of NIIDZs on improving neighbouring efficiency is rather complex. According to relevant theories in spatial economics47, an NIIDZ has a strong “siphon effect” on surrounding cities, thus forming a “shadow zone” around the central area48, which leads to the loss of innovative elements in the areas surrounding the NIIDZ. As a result, improving the level of STI efficiency is difficult. Only after the agglomeration shadow zone is eliminated can the NIIDZ generate a positive spillover effect on surrounding cities. When the spatial distance exceeds a certain extent, the driving effect of the NIIDZ on improvements in STI efficiency will decrease again for reasons such as the increased cost of knowledge transfer, which results in decreased transfer efficiency, the local preference characteristics of collaborative innovation, and the widespread existence of “local protectionism”. Therefore, there may be obvious spatial heterogeneity in the effect of an NIIDZ on improving the STI efficiency of surrounding cities. On this basis, the following hypotheses are proposed:
Hypothesis 3
The innovative city pilot policy not only promotes the urban innovation ability of the local region but also has a spatial spillover effect on neighbouring regions.
Hypothesis 4
There is significant spatial heterogeneity in the spatial spillover effect of an NIIDZ on the STI efficiency of neighbouring regions.
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