Agglomeration, knowledge spillover and provincial innovation - Evidences from Mainland China

This paper makes some explorations on the impacts of industrial agglomeration on regional innovation from the perspective of knowledge spillover. We construct a Regional Knowledge Production Function by taking into account knowledge spillover of MAR and Jacobs. On this basis, we measure the two types of knowledge spillover by the weight of all industry Hoover Location Entropy and alternative Their Index in each region, the robust regression results from 1999-2004 panel data using DIF GMM and SYS GMM under finite sample reveal that the intra-industry knowledge spillover enhances the regional innovation significantly, while the role of inter-industry knowledge spillover seems to be relatively weaker. The results also indicate that provincial innovation ability in China mainly benefit from advantages of specialized industry districts, while the role of diversity and urbanization economy are expected to be strengthened in the future.