Can urban agglomeration policy improve the innovation efficiency of cities in China?

This study investigates the influence of urban agglomeration policy on innovation efficiency through a difference-in-differences analysis. Findings reveal that urban agglomeration policy has led to a decrease of 3.65% in the innovation efficiency of urban agglomerations, although there is heterogeneity in the policy’s impact across these agglomerations. Cities within agglomerations are categorised into core and non-core cities, while the policy has boosted innovation efficiency by 10.1% in core cities but by −3.89% in non-core cities. Overall, urban agglomeration policies exhibit a more pronounced innovation siphoning effect, and mechanism testing of labour and commodity markets corroborates this observation.