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Institutions and Innovation: Evidence from Local Leaders in Chinese Cities

Yang Chen, Luan Fushu () and Paulo Regis

No 2018-03, RIEI Working Papers from Xi'an Jiaotong-Liverpool University, Research Institute for Economic Integration

Abstract: Against the backdrop of China’s transition from fast GDP growth to sustainable development, we explore the role of institutions, meritocracy in particular, in shaping innovative development. With manually-collected patent information and profiles for two types of leaders in 280 prefecture cities during 2001-2014, we find that promoting younger cadre with rich work experiences benefits innovation. In regard to the cadre selection regime, tenure and party competition positively correlate with innovation; the role of turnover differs depending on the leader’s type. Local leaders are more responsive to the central’s long-term innovation strategy in cities with lower GDP performance. These results are robust to the inclusion of other institutional factors such as decentralization, crackdown on corruption, and marketization as well as urban externalities and agglomeration. We provide fresh evidence of the leader’s role in promoting innovative development and generate rich policy implications to study meritocracy in China.

Keywords: innovation; cadre appointment and selection; local leaders; institutions; spatial spillover; China (search for similar items in EconPapers)
JEL-codes: C33 H11 O30 P26 R11 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2018-07-11
New Economics Papers: this item is included in nep-cna, nep-cse, nep-cul, nep-ino, nep-sbm, nep-tid, nep-tra and nep-ure
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