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Will connectedness between urban areas foster cooperation?——The impact of urban agglomerations on open innovation

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  • Wang, Xinzhu
  • Pan, Mengmeng

Abstract

Enhancing collaboration among enterprises is crucial for fostering and achieving creative progress across the region and within the industry. Distributing resources and risks is an efficient approach to leverage external benefits that can offset a firm’s inherent deficiencies. This study investigates the impact of urban agglomerations on fostering open innovation among firms traded on China’s A-share markets from 2010 to 2021. Our findings reveal that urban agglomerations decrease the quantity of open innovation but enhance its quality. Mechanism analysis indicates that urban agglomerations improve the quality of open innovation by dismantling transportation barriers; however, urban agglomerations reduce open innovation quantity by promoting industrial concentration. This relationship between urban agglomerations and open innovation is pronounced in large firms. Our study also show that urban agglomerations cannot offset managerial myopia. For firms with limited information disclosure, urban agglomerations exert a positive influence on the quality of open innovation.

Suggested Citation

  • Wang, Xinzhu & Pan, Mengmeng, 2025. "Will connectedness between urban areas foster cooperation?——The impact of urban agglomerations on open innovation," The Quarterly Review of Economics and Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:quaeco:v:103:y:2025:i:c:s106297692500078x
    DOI: 10.1016/j.qref.2025.102037
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