The Development of the Spatial Concentration and Co-agglomeration of Industrial and Public Innovation in China - A Province-level Analysis

This paper investigates the levels and the recent development of the spatial concentration as well as the co-agglomeration of the innovation activities (R&D inputs as well as outputs) from industrial innovators (medium sized and large enterprises) and public innovators (universities and research institutes) in China. The regional concentration of innovative activities across Chinese provinces is measured by the generalized Theil index, the co-agglomeration of innovative activities from different types of innovators by the Ellison-Glaeser co-agglomeration index. Differences between provinces in population size and economic performance (GDP, exports) are taken into account. Results show that there are some noteworthy differences between types of innovators both with respect to the levels of concentration and their changes over time. Overall, results suggest that the regional distribution of innovation activities of firms is, relative to that of public innovators, more strongly related to the provinces' economic performance, but relatively less strongly affected by (regional) policy considerations. As regards the co-agglomeration of innovation activities of different types of innovators, results show that the co-agglomeration indices are rather low and still declining over time, suggesting that potential benefits (e.g., knowledge spillovers) resulting from the geographical proximity of industrial and public innovators remain to a large extent unrealized in China today.