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Policy reinvention and regional innovation performance: from financial, fiscal, tax, and talent policy mix networks

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  • Zhao, Yu
  • Guan, Hongling

Abstract

This study discusses central-subnational policy reinvention's impact on regional innovation performance. We employ Large Language Models (LLMs) and network analysis to large-scale data of policy documents, characterizing policy mix of financial and other policies through "policy instruments-policy targets" network, and measuring policy reinvention between subnational and central governments. The empirical results demonstrate that policy reinvention significantly enhances regional innovation performance. Mechanism analysis shows that this effect operates primarily through alleviating resource misallocation. Heterogeneity analysis shows that the positive effects of policy reinvention differ by location and are weakened under high fiscal decentralization and fiscal pressure.

Suggested Citation

  • Zhao, Yu & Guan, Hongling, 2025. "Policy reinvention and regional innovation performance: from financial, fiscal, tax, and talent policy mix networks," Finance Research Letters, Elsevier, vol. 86(PC).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pc:s1544612325018240
    DOI: 10.1016/j.frl.2025.108570
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