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Urban infrastructure impacts on innovation quantity and quality: Substitution and complementary effects

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  • Yang, Sheng-Hao
  • Jiang, Ren-Ai
  • Su, Zu-Long
  • Jefferson, Gary H.

Abstract

As China's infrastructure expands and integrates creating pathways for the mobility and transfer of innovative knowledge, the interaction of urban knowledge transfers may function as substitutes or complements. The purpose of this study is to conceptualize and delineate urban knowledge systems, their mobility, and the features of their interactions that exhibit either the propensity to function as knowledge substitutes or complements. Specifically, based on a panel of Chinese cities, we analyze the interactive effects of the Internet and high-speed rail (HSR) on innovation from the perspectives of quantity, quality, and structure. The results indicate that while the Internet and HSR substitute for each other in driving innovation quantity, this combination exerts a complementary effect on fostering innovation quality. We find that this dual effect results from inter-city knowledge integration reducing urban innovation bubbles while increasing the scale and proportion of breakthrough innovations, thereby promoting the overall enhancement in innovation quality. We also find that a critical source of the improved quality outcomes is the combined effect of the Internet and HSR on innovation learning and collaboration. Finally, heterogeneity analysis shows that the quality complementary effect of the two types of knowledge-mobility infrastructure is more pronounced within the 2 h HSR range of innovation centers, in Eastern and Coastal regions and cities that exhibit higher living standards, higher R&D expenditure, and strong intellectual property protection. This study not only examines the qualitative linkage effects of infrastructure development, it also examines the avenues through which quantity substitution effects and quality complementary effects function.

Suggested Citation

  • Yang, Sheng-Hao & Jiang, Ren-Ai & Su, Zu-Long & Jefferson, Gary H., 2026. "Urban infrastructure impacts on innovation quantity and quality: Substitution and complementary effects," Technovation, Elsevier, vol. 150(C).
    • Handle: RePEc:eee:techno:v:150:y:2026:i:c:s0166497225002202
    DOI: 10.1016/j.technovation.2025.103388
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    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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