Unlocking the role of smart cities in technological innovation: evidence from China

This paper discusses the impact of smart city on technological innovation and the underlying mechanism. Based on county-level panel data in China from 2005 to 2020, we use the 'smart city' construction as a quasi-natural experiment to identify its impact on technological innovation. Our findings show that: (1) Smart city construction significantly promotes technological innovation. (2) Smart cities indirectly promote technological innovation through technology resource allocation, industry agglomeration effects, and entrepreneurial spirit. (3) Due to 'digital divide', the innovation effects of smart cities are more pronounced in eastern regions and cities with high levels of digital infrastructure and information technology talent endowment. (4) The 'smart city' pilots generate spatial spillover effects, which enhance the technological innovation level of neighbouring cities.