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New infrastructure special debt, agglomeration and urban innovation: Evidence from China

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  • Zhang, Baojun
  • Li, Guangqin

Abstract

In this paper, the impact of new infrastructure special debt (NISD) on urban innovation was examined using city panel data from China and a difference-in-difference model. Results indicate that the expansion of NISD significantly enhances urban innovation levels, with robust conclusions. Mechanism analysis reveals that NISD can elevate urban innovation via talent, industrial, and economic agglomeration. Heterogeneity analysis demonstrates that the influence of NISD on urban innovation varies based on region (in a city), size, and whether it is located within one of the five major urban agglomerations. Further analysis shows that NISD and urban innovation jointly drive the development of new high-quality productive forces. This paper presents empirical evidence for optimizing special debt fund investments to foster the development of urban innovation while offering policy implications for achieving high-quality economic growth.

Suggested Citation

  • Zhang, Baojun & Li, Guangqin, 2026. "New infrastructure special debt, agglomeration and urban innovation: Evidence from China," Economic Modelling, Elsevier, vol. 154(C).
    • Handle: RePEc:eee:ecmode:v:154:y:2026:i:c:s0264999325003633
    DOI: 10.1016/j.econmod.2025.107368
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