Theoretically, we analyzed the mechanism of urban compactness affecting urban innovation capacity, and empirically analyzed the relationship between urban compactness and urban innovation capacity and its driving effects based on the measurement of compactness in 31 large and medium-sized cities. The findings of the study demonstrate that urban compactness plays a crucial role in promoting urban innovation capacity. Specifically, there are notable variations in the impact based on regional and city size heterogeneity. In terms of regional heterogeneity, the compact development of central and western cities leads to a significant enhancement of urban innovation compared to their eastern counterparts. Moreover, regarding city size heterogeneity, increased compactness in larger cities exhibits a positive influence on urban innovation capacity, while the compact development mode of megacities does not significantly impact innovation development. Furthermore, the influence mechanism of urban compactness on urban innovation capacity operates through multiple pathways, including the direct effect, knowledge spillover effect of human capital, agglomeration economy effect of industrial diversity, and the time-space compression effect of transportation access.
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