Escaping from “dream city”? Housing price, talent, and urban innovation in China

While there has been considerable academic discourse surrounding urban housing prices, talent, and innovation, the mediating role of housing prices in influencing urban innovation through talent has received limited attention. Utilising a city-level panel dataset covering the period of 2005–2020, we investigate how housing prices affect urban innovation in Chinese cities, focusing on how this influence is mediated by talent concentration. The spatial analysis results demonstrate that the high-value areas of housing prices, talent concentration, and urban innovation are concentrated in urban agglomerations along the eastern coastal regions and provincial capital cities in the central and western areas, presenting spatial spillovers and spatial unevenness. The econometric analysis reveals a positive influence of talent concentration on urban innovation but negatively affects urban innovation through talent concentration. This negative mediating effect becomes more pronounced after 2010 and varies across city groups. In cities with an urban population below 0.291 million, housing prices positively affect innovation mediated by talent. However, the mediating effect turns negative in cities with an urban population above 1.243 million. These findings have significant theoretical and policy implications for comprehending the implicit influence of the housing market on urban development through the lens of talent concentration.