Impact and mechanism analysis of smart city policy on urban innovation: Evidence from China

Innovation is a key source of economic development, and arguably the driving engine of urban economic development. Based on a quasi-natural experiment of national smart city construction, this paper investigates the urban innovation effect of policy using the multi-phase differences-in-differences model. The results show that implementing a smart city construction policy improves the urban innovation output, and that the effect on the degree of urban innovation was relatively significant after implementation. A further heterogeneity analysis showed that smart city development in different regions has different impacts on urban innovation; specifically, compared with the central and western regions, smart city construction in eastern China was seen to have a higher impact on urban innovation output. Moreover, the findings also demonstrated that smart city construction policies have different impacts on urban innovation output in cities of different urban scales. Namely, applying the smart city construction policy to medium-sized cities will exert a positive effect on urban innovation. This study aims to contribute to the promotion of urban development, the improvement of urban innovation capacity.