Do Place-Based Policies Promote Local Innovation and Entrepreneurial Finance?

45 Pages Posted: 13 Feb 2018 Last revised: 16 May 2019

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 and using a difference-in-differences approach, we find the establishment of national high-tech zones has a positive effect on local innovation output and the 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 that allow the establishment of national high-tech zones positively affect local innovation and entrepreneurship. Our paper sheds new light on the effects of China’s national high-tech zones and provides new evidence to the debate about the real effect of place-based policies.

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

JEL Classification: G30, L26, O31, R50

Suggested Citation

Tian, Xuan and Xu, Jiajie, Do Place-Based Policies Promote Local Innovation and Entrepreneurial Finance? (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 )

Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
216
Abstract Views
953
rank
140,363
PlumX Metrics