Special economic zones and inter-prefecture collaborative innovation: evidence from China

This paper studies whether and how the establishment of new special economic zones (SEZs) following a regulatory policy on SEZ construction can affect inter-prefecture collaborative innovation in China. This policy required SEZs to develop leading industries reflecting the local region's comparative advantage, and to improve the business environment. We find new SEZs established after this policy increased inter-prefecture joint applications for invention-patents of a treated prefecture by 25–28%. The positive effect was more salient for eastern provinces and the two largest urban agglomerations. Agglomeration of leading industries and the strengthened intellectual property right protection effectively increased collaborative innovation.