Policy inconsistency and regional innovation dynamics in China: Evidence from textual analysis

We construct a new measure of city-level policy inconsistency using textual analysis and examine its impact on regional innovation in China. The results indicate that policy inconsistency significantly reduces regional total patent applications and regional corporate applications, but is positively related to industry-university-research collaborative patent applications. Mechanisms analyses indicate that policy inconsistency exacerbates both regional resource allocation distortion and corporate risk aversion, thereby hindering regional total and corporate innovation activities. Research investment and funding for higher education institutions are not sensitive to policy inconsistency, and higher education institutions serve as a "safe haven" for corporations.