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Institutions and Innovation: Evidence from Local Leaders in Chinese Cities

Author

Listed:
  • Chen, Yang

    () (Division of Economics, Xi'an Jiaotong-Liverpool University)

  • Luan, Fushu

    () (Division of Economics, Xi'an Jiaotong-Liverpool University)

  • Regis, Paulo José

    () (Division of Economics, Xi'an Jiaotong-Liverpool University)

Abstract

Against the backdrop of China’s transition from fast GDP growth to sustainable development, we explore the role of institutions, meritocracy in particular, in shaping innovative development. With manually-collected patent information and profiles for two types of leaders in 280 prefecture cities during 2001-2014, we find that promoting younger cadre with rich work experiences benefits innovation. In regard to the cadre selection regime, tenure and party competition positively correlate with innovation; the role of turnover differs depending on the leader’s type. Local leaders are more responsive to the central’s long-term innovation strategy in cities with lower GDP performance. These results are robust to the inclusion of other institutional factors such as decentralization, crackdown on corruption, and marketization as well as urban externalities and agglomeration. We provide fresh evidence of the leader’s role in promoting innovative development and generate rich policy implications to study meritocracy in China.

Suggested Citation

  • Chen, Yang & Luan, Fushu & Regis, Paulo José, 2018. "Institutions and Innovation: Evidence from Local Leaders in Chinese Cities," RIEI Working Papers 2018-03, Xi'an Jiaotong-Liverpool University, Research Institute for Economic Integration.
  • Handle: RePEc:xjt:rieiwp:2018-03
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    File URL: http://58.210.89.21/RePEc/xjt/working-papers/RIEI-WP_2018-03.pdf
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    More about this item

    Keywords

    innovation; cadre appointment and selection; local leaders; institutions; spatial spillover; China;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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