IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i17p7880-d1739888.html

Technological Innovation, Industrial Structure Upgrading, and the Coordinated Development of Regional Economies

Author

Listed:
  • Hui Wang

    (School of Economics, Yunnan University of Finance and Economics, Kunming 650221, China
    Yancheng Branch of Jiangsu Provincial Academy of Social Sciences, Yancheng 224000, China)

  • Lin Zhu

    (School of Economics, Yunnan University of Finance and Economics, Kunming 650221, China)

Abstract

The purpose of this study is to systematically examine the impact of technological innovation on the coordinated development of regional economies and its internal mechanism. It is aimed at revealing whether and how technological innovation promotes the coordinated development of regional economies, and further identifying its heterogeneity characteristics and boundary conditions in the space–time dimension. The research was conducted using panel data for 258 prefecture-level cities in China from 2011 to 2021. This study found that technological innovation significantly promoted the coordinated development of regional economies; this effect was more prominent in China’s eastern region and the Yangtze River Economic Belt. The mechanism test shows that technological innovation can optimize regional resource allocation and narrow the development gap by promoting industrial structure upgrades and rationalization. Further analysis shows that the level of marketization has a nonlinear regulatory effect on the coordination effect of technological innovation, with two threshold levels. A heterogeneity analysis reveals significant differences in the effects of technological innovation in different regions in China, especially in the western region and the northwest side of the Hu Changyong line. The research leads to four key policy recommendations. First, it is important to strengthen the core driving role of technological innovation and implement regionally differentiated innovation support policies. Second, industrial structure upgrades should be encouraged through industrial chain coordination. The third recommendation is to improve the market-oriented institutional environment and minimize barriers to factor flow. Fourth, supporting coordinated policies, such as optimizing human capital and introducing high-quality foreign capital, is necessary to establish a sustainable long-term mechanism for regional coordinated development.

Suggested Citation

  • Hui Wang & Lin Zhu, 2025. "Technological Innovation, Industrial Structure Upgrading, and the Coordinated Development of Regional Economies," Sustainability, MDPI, vol. 17(17), pages 1-23, September.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:17:p:7880-:d:1739888
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/17/7880/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/17/7880/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nicholas Bloom & Raffaella Sadun & John Van Reenen, 2012. "Americans Do IT Better: US Multinationals and the Productivity Miracle," American Economic Review, American Economic Association, vol. 102(1), pages 167-201, February.
    2. Rodrik, Dani, 2004. "Industrial Policy for the Twenty-First Century," Working Paper Series rwp04-047, Harvard University, John F. Kennedy School of Government.
    3. Margarida Duarte & Diego Restuccia, 2010. "The Role of the Structural Transformation in Aggregate Productivity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 129-173.
    4. Bronwyn H. Hall & Vania Sena, 2017. "Appropriability mechanisms, innovation, and productivity: evidence from the UK," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(1-2), pages 42-62, February.
    5. Uwe Cantner & Sarah Kösters, 2012. "Picking the winner? Empirical evidence on the targeting of R&D subsidies to start-ups," Small Business Economics, Springer, vol. 39(4), pages 921-936, November.
    6. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    7. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    8. Riccardo Crescenzi & Andrés Rodríguez-Pose & Michael Storper, 2012. "The territorial dynamics of innovation in China and India," Journal of Economic Geography, Oxford University Press, vol. 12(5), pages 1055-1085, September.
    9. Qian Li & Jingyuan Yu, 2023. "Place-based policies and regional innovation: evidence from western development in China," Applied Economics, Taylor & Francis Journals, vol. 55(9), pages 999-1011, February.
    10. Philippe Aghion & Antoine Dechezleprêtre & David Hémous & Ralf Martin & John Van Reenen, 2016. "Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 1-51.
    11. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    12. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 577-598.
    13. Dani Rodrik, 2018. "New Technologies, Global Value Chains, and the Developing Economies," CESifo Working Paper Series 7307, CESifo.
    14. Peneder, Michael, 2003. "Industrial structure and aggregate growth," Structural Change and Economic Dynamics, Elsevier, vol. 14(4), pages 427-448, December.
    15. Hasan, Iftekhar & Tucci, Christopher L., 2010. "The innovation-economic growth nexus: Global evidence," Research Policy, Elsevier, vol. 39(10), pages 1264-1276, December.
    16. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-640, June.
    17. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, December.
    18. Chris Forman & Avi Goldfarb & Shane Greenstein, 2012. "The Internet and Local Wages: A Puzzle," American Economic Review, American Economic Association, vol. 102(1), pages 556-575, February.
    19. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    20. Zhuan Xie & Xiaobo Zhang, 2015. "The patterns of patents in China," China Economic Journal, Taylor & Francis Journals, vol. 8(2), pages 122-142, May.
    21. Fagerberg, Jan & Verspagen, Bart, 2002. "Technology-gaps, innovation-diffusion and transformation: an evolutionary interpretation," Research Policy, Elsevier, vol. 31(8-9), pages 1291-1304, December.
    22. Autio, Erkko & Kenney, Martin & Mustar, Philippe & Siegel, Don & Wright, Mike, 2014. "Entrepreneurial innovation: The importance of context," Research Policy, Elsevier, vol. 43(7), pages 1097-1108.
    23. Daron Acemoglu & Pascual Restrepo, 2018. "Artificial Intelligence, Automation and Work," Boston University - Department of Economics - Working Papers Series dp-298, Boston University - Department of Economics.
    24. Neil Lee & Andrés Rodríguez-Pose, 2013. "Innovation and spatial inequality in Europe and USA," Journal of Economic Geography, Oxford University Press, vol. 13(1), pages 1-22, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthias Firgo & Peter Mayerhofer, 2015. "Wissens-Spillovers und regionale Entwicklung - welche strukturpolitische Ausrichtung optimiert des Wachstum?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 144, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    2. Pardy, Martina, 2025. "Multinationals and intra-regional innovation concentration," LSE Research Online Documents on Economics 127983, London School of Economics and Political Science, LSE Library.
    3. Tom Broekel & Lars Mewes, 2017. "Analyzing the impact of R&D policy on regional diversification," Papers in Evolutionary Economic Geography (PEEG) 1726, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2017.
    4. Max Nathan & Henry Overman, 2013. "Agglomeration, clusters, and industrial policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 29(2), pages 383-404, SUMMER.
    5. Prasanna Tambe & Lorin M. Hitt, 2014. "Job Hopping, Information Technology Spillovers, and Productivity Growth," Management Science, INFORMS, vol. 60(2), pages 338-355, February.
    6. Matthias Firgo & Peter Mayerhofer, 2015. "Wissensintensive Unternehmensdienste, Wissens-Spillovers und regionales Wachstum. Teilprojekt 1: Wissens-Spillovers und regionale Entwicklung – Welche strukturpolitische Ausrichtung optimiert das Wachstum?," WIFO Studies, WIFO, number 58342.
    7. Eduardo Jimenez‐Moro & Panagiotis Piperopoulos & Mario Kafouros & Alan Au Kai Ming, 2023. "Innovation dynamics and club convergence in innovation activity in China: A temporal perspective," Papers in Regional Science, Wiley Blackwell, vol. 102(4), pages 791-816, August.
    8. Iritié, B. G. Jean-Jacques, 2014. "Enjeux des politiques industrielles basées sur les clusters d'innovation: cas des pôles de compétitivité [Issues of Innovative Clusters-based Industrial Policy: Case of Pole of Competitiveness]," MPRA Paper 54429, University Library of Munich, Germany.
    9. Andrea Bonaccorsi & Cinzia Daraio, 2013. "Knowledge spillover effects at the sub-regional level. Theory and estimation," DIAG Technical Reports 2013-13, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
    10. Alejandro Díaz-Bautista, 2003. "Convergence And Economic Growth Considering Human Capital And R&D Spillovers," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 2(2), pages 127-143, Junio 200.
    11. Xu, Cheng-Gang & Guo, Di & Jiang, Kun & Yang, Xiyi, 2017. "Clustering, Growth, and Inequality in China," CEPR Discussion Papers 12543, Centre for Economic Policy Research.
    12. Grundmann, Rainer & Gries, Thomas, 2015. "Crucial for Modern Sector Development? The Role of Exports and Institutions in Developing Countries," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112962, Verein für Socialpolitik / German Economic Association.
    13. Erik E. Lehmann & Matthias Menter & Katharine Wirsching, 2022. "University spillovers, absorptive capacities, and firm performance," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(1), pages 125-150, March.
    14. Castellacci, Fulvio, 2008. "Innovation and the competitiveness of industries: comparing the mainstream and the evolutionary approaches," MPRA Paper 27523, University Library of Munich, Germany.
    15. Pardy, Martina, 2025. "Multinationals and intra-regional innovation concentration," Research Policy, Elsevier, vol. 54(6).
    16. Edward L. Glaeser & Joshua D. Gottlieb, 2009. "The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States," Journal of Economic Literature, American Economic Association, vol. 47(4), pages 983-1028, December.
    17. Kemp, R. & van den Bergh, J., 2006. "Economics and Transitions: Lessons from Economic Sub-disciplines," MERIT Working Papers 2006-038, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    18. Aikaterini Kokkinou, 2005. "Entrepreneurship, Innovation Activities and Regional Growth," ERSA conference papers ersa05p419, European Regional Science Association.
    19. Fu, Xiaolan & Pietrobelli, Carlo & Soete, Luc, 2011. "The Role of Foreign Technology and Indigenous Innovation in the Emerging Economies: Technological Change and Catching-up," World Development, Elsevier, vol. 39(7), pages 1204-1212, July.
    20. Rana P. Maradana & Rudra P. Pradhan & Saurav Dash & Kunal Gaurav & Manju Jayakumar & Debaleena Chatterjee, 2017. "Does innovation promote economic growth? Evidence from European countries," Journal of Innovation and Entrepreneurship, Springer, vol. 6(1), pages 1-23, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:17:p:7880-:d:1739888. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager The email address of this maintainer does not seem to be valid anymore. Please ask MDPI Indexing Manager to update the entry or send us the correct address (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.