City innovation ability and internet infrastructure development: Evidence from the “Broadband China” policy

Abstract

“Broadband China” (BC), the new Chinese government implementation in 2013, has led to substantial investments in internet infrastructure development. Furthermore, accurately evaluating its effects is of great significance. BC is taken as a quasinatural experiment in this paper. Data from 278 Chinese cities from 2007 to 2019 are used to evaluate this policy influence on city innovation ability by building a regression discontinuity (RD) design model. In addition, its heterogeneity and mechanism are also analyzed. The results show that (1) city innovation ability is significantly improved by the BC policy, and this is still valid after robustness tests. (2) The influence of the BC policy on city innovation ability is heterogeneous and more significant in more prosperous regions, such as in the eastern regions and in large cities. (3) Mechanism analysis shows that the city innovation ability is enhanced by improving knowledge spillover and stimulating entrepreneurial activities.