Do Place-Based Policies Promote Local Innovation and Entrepreneurship?

52 Pages Posted: 13 Feb 2018 Last revised: 25 Feb 2020

See all articles by Xuan Tian

Xuan Tian

Tsinghua University - PBC School of Finance

Jiajie Xu

Boston College - Department of Finance

Date Written: February 5, 2018

Abstract

This paper explores how a prominent place-based policy in China, the national high-tech zones, affects local innovation and entrepreneurial activities. Relying on plausible exogenous variation in place-based policies caused by staggered establishments of national high-tech zones, we find that the establishment of national high-tech zones has positive effects on local innovation output and entrepreneurial activities. A number of additional tests suggest that the effects appear causal. Access to financing resources, reductions in administrative burdens, and talent cultivation are three plausible underlying channels through which national high-tech zones positively affect local innovation and entrepreneurship. Our paper sheds new light on the debate about the real effects of place-based government policies.

Keywords: Entrepreneurship, Innovation, National high-tech zones, Access to finance, Administrative burdens, Talent cultivation

JEL Classification: G24, G38, O38, L26

Suggested Citation

Tian, Xuan and Xu, Jiajie, Do Place-Based Policies Promote Local Innovation and Entrepreneurship? (February 5, 2018). Available at SSRN: https://ssrn.com/abstract=3118661 or http://dx.doi.org/10.2139/ssrn.3118661

Xuan Tian (Contact Author)

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengfu Road
Haidian District
Beijing 100083
China
+86-10-62794103 (Phone)

HOME PAGE: http://xuantian.info/

Jiajie Xu

Boston College - Department of Finance ( email )

Chestnut Hill, MA
United States

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