The Impact of China’s New Infrastructure Development on Urban Innovation Quality—A Quasi-Natural Experiment of Smart City Pilots

Abstract

Currently, human society is in the era of the digital economy, driven by a new wave of digital technology revolution. Against this backdrop, China actively draws on global development concepts, accelerating the advancement of new infrastructure construction. This initiative aims to stabilize current economic demands while laying a material foundation for long-term development. Therefore, the efficient implementation of this new infrastructure has become a pressing issue for China, as unlocking its empowering role in the national economy is of paramount importance. This study, based on balanced panel data from China’s initial smart city pilot projects from 2008 to 2018, employs both two-way fixed effects and mediation effect models to empirically examine the impact of new infrastructure construction on urban innovation quality, considering endogeneity issues. The research findings reveal that new infrastructure construction enhances urban innovation quality by expediting industrial structural upgrades and enhancing total factor productivity. Furthermore, due to variations in geographical location and population density, there is heterogeneity in the impact of new infrastructure on urban innovation quality, with investments in new infrastructure exerting a more pronounced positive effect in cities with high population density.