Do Place-Based Policies Promote Local Innovation and Entrepreneurship?

Review of Finance, Forthcoming

79 Pages Posted: 13 Feb 2018 Last revised: 18 Jul 2022

See all articles by Xuan Tian

Xuan Tian

Tsinghua University - PBC School of Finance

Jiajie Xu

University of Iowa - Henry B. Tippie College of Business

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 output and entrepreneurial activities. Making use of staggered establishments of national high-tech zones in various Chinese cities, 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 finance, reductions in administrative burdens, and talent cultivation are three plausible underlying economic channels. Our paper sheds new light on the evaluation of the effectiveness of China’s place-based 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). Review of Finance, Forthcoming, 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

University of Iowa - Henry B. Tippie College of Business ( email )

Pappajohn Business Building S296
Iowa City, IA 52242-1000
United States

HOME PAGE: http://www.jiajiexu.com/

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