The Economic Effect of Urban Innovation Capacity on Employment in China

Abstract

The level of urban employment is one of the important evaluating factors for urban economic development, investigating the influencing factors of urban employment level is of great policy value. Contemporarily, economic development has entered a new stage, which has gradually changed from factor-driven development to innovationdriven development. In order to verify the growth effect of urban innovation level on employment, an econometric model is established. Specifically, we collect and organize the innovation capability indexes and employment population data of 200 cities in China. Then an ordinary least squares regression model is constructed to obtain the following results. First, the improvement of urban innovation capability can indeed lead to the improvement of urban employment level. In addition, the impact of innovation on employment growth does not have significant heterogeneity. Besides, there is no significant difference between the effect on urban employment level and private employment level. Subsequently, the mechanism of innovation level effects is demonstrated through economic logic explaining. Finally, we propose corresponding policy suggestions on urban innovation level improvement.