Can Free Trade Zone Policy Enhance Urban Innovation Capability?Research Based on Panel Data of Chinese Cities from 2010 to 2019
Innovation drives development,and innovative cities are important pillars for the construction of an innova-tive country.As a platform for opening up to the outside world and institutional innovation,it is necessary to explore whether Free Trade Zones can effectively promote innovation in mechanisms and systems,and innovation in development models,as well as whether they can effectively drive the improvement of urban innovation capabilities.This article selects data from 93 cities in China from 2010 to 2019 as the basic research sample,with 38 cities that have established Free Trade Zones as the experimental group and 55 cities that have not established Free Trade Zones as the control group,to construct a multi-period difference-in-differences model to study the driving effect of free trade zone policies on urban in-novation capabilities.The results show that:(1)Free Trade Zone policies have significantly improved urban innovation Capability through two aspects:attracting scientific and technological talents to enrich the supply of innovation resources,and optimizing the innovation system by improving the business environment;(2)The establishment of Free Trade Zones has heterogeneous effects on urban innovation capability across different regions and administrative levels,and the innova-tive driving effect is more pronounced in the sub-samples of central and western,northeastern cities,non-provincial capital municipalities,and coastal cities;(3)Using a spatial econometric model,it is found that within a 150 km radius around Free Trade Zones,as the distance to the Free Trade Zone increases,the innovation-driving effect on surrounding cities shows an increasing trend followed by a gradual decrease.Based on the research conclusions,the policy recommendations proposed in the paper are as follows:First,when formulating Free Trade Zone policy systems and assessing policy implementation effects,there should be a focus on the dual enhancement of urban economic quantity and quality,with the aim of stimulating urban innovation vitality and pro-moting local high-quality development through higher level and greater efforts of opening up and reform policies.Second,make full use of the characteristics and differences of Free Trade Zones in driving local innovation capabilities in cities of different administrative levels.Tailor innovation incentive policies to different regions and scales based on urban industrial layouts and innovation foundations.Third,strengthen the linkage between Free Trade Zones and urban development and promote regional coordinated development.Leverage the spatial spillover effect of Free Trade Zone policies to break the cur-rent situation of unbalanced innovation capabilities among cities and achieve regional collaborative innovation development.The marginal contributions of this article are as follows:First,it enriches the research perspectives on the evaluation of the effects of Free Trade Zone policies.Existing studies mainly focus on the economic driving effect of Free Trade Zone policies,however,with the deepening implementation of the innovation-driven development strategy,the improve-ment of urban innovation capability by Free Trade Zone policies has been placed in a more prominent position.This ar-ticle takes the 38 cities nationwide that have set up Free Trade Zones as the research object,providing relatively compre-hensive empirical evidence for Free Trade Zone policies driving urban innovation capability;Second,a new indicator-the number of"best practice cases"of Free Trade Zones is used to measure the business environment of Free Trade Zones.Best practice cases are released by the Ministry of Commerce and have been refined and summarized in the practice of each Free Trade Zone.They cover multiple aspects,including investment facilitation,financial inclusive innovation,and government services,and are aligned with the national development and reform commission's business environment evaluation index system,providing a new perspective for studying and evaluating Free Trade Zone policies;Third,this ar-ticle provides mechanism exploration and path selection for how to enhance urban innovation capability and build an inno-vative city,and puts forward optimization suggestions from cohesion of innovative talents,optimization of business envi-ronment,integration and upgrading of industry and city,and synergistic development of region,etc.,so as to promote the quality change,efficiency change,and power change of the economic development of Free Trade Zones and neighboring cities by innovation.