Will trade facilitation enhance the innovation capability of Chinese cities? Evidence from 279 prefecture-level cities in China

Trade facilitation and technological innovation are pivotal strategies for the high-quality development of cities in China within the context of the new development pattern. In order to clarify the mechanisms through which trade facilitation increases urban innovation capacity, this paper uses panel data from 279 prefecture-level cities in China between 2006 and 2021. It focuses on the factor intensification effect and technology transfer effect, as well as the regulatory and threshold effects of government technology support. The research findings indicate that: Trade facilitation significantly improves the innovation capabilities of Chinese cities, a conclusion that remains robust after various robustness and endogeneity tests. Factor aggregation and technology transfer serve as critical channels through which trade facilitation impacts urban innovation capabilities. The degree of government technology support can positively moderate the relationship between trade facilitation and urban innovation capacity, displaying a non-linear characteristic. Trade facilitation has a greater positive effect on urban innovation capacity in central and western cities, non-central cities, and resource-endowed cities. The above conclusions provide a theoretical foundation and policy insights for enhancing trade facilitation and promoting urban innovation capabilities within the framework of the new development pattern.