Economic Impact of University Knowledge Spillovers on Firm Innovation: A Spatial Analysis from China

Xiangshuo Zhang

doi:10.31181/ijes1512026217

Authors

Xiangshuo Zhang Department of Management and Marketing, Faculty of Business and Economics, The University of Melbourne, Melbourne, Australia Author https://orcid.org/0009-0009-1907-4177

DOI:

https://doi.org/10.31181/ijes1512026217

Keywords:

Knowledge Spillovers, Geographic Distance, Corporate innovation, Regional Economic Development, University–Enterprise Collaboration

Abstract

University knowledge spillovers are widely recognized as vital drivers of corporate innovation and regional economic development. However, the economic impact of geographic distance between enterprises and universities on innovation output remains underexplored. This study investigates the relationship between spatial proximity to universities and corporate innovation performance using invention patent data from Chinese A-share listed firms between 2010 and 2022. Employing Ordinary Least Squares (OLS) models with city and year fixed effects, we find a significant negative association between geographic distance and firms’ innovation outputs. Mechanism analyses identify university–enterprise patent collaboration and firms’ innovation-related information disclosure as key economic channels for knowledge spillover effects. Moreover, heterogeneity analyses show that these effects are more pronounced in cities with smaller economic scales or limited innovation resources, underscoring the importance of spatial economic factors. By analyzing the impact of university knowledge spillovers on firm innovation, this study broadens the set of identified determinants of corporate innovation, thereby providing additional evidence and theoretical foundations for advancing high-quality, innovation-driven economic development.

Downloads

Download data is not yet available.

References

Schumpeter, J. A. (2003). The theory of economic development. In J. Backhaus (Ed.), Joseph Alois Schumpeter (pp. 61–116). Springer. https://doi.org/10.1007/0-306-48082-4_3 DOI: https://doi.org/10.1007/0-306-48082-4_3

Qiu, S., Liu, X., & Gao, T. (2017). Do emerging countries prefer local knowledge or distant knowledge? Spillover effect of university collaborations on local firms. Research Policy, 46(7), 1299–1311. https://doi.org/10.1016/j.respol.2017.06.001 DOI: https://doi.org/10.1016/j.respol.2017.06.001

Lin, S. (2015). Are ivory towers truly ivory? Knowledge spillovers and firm innovation. Journal of Economics and Business, 80, 21–36. https://doi.org/10.1016/j.jeconbus.2015.03.001 DOI: https://doi.org/10.1016/j.jeconbus.2015.03.001

Glaeser, S., & Lang, M. (2024). Measuring innovation and navigating its unique information issues: A review of the accounting literature on innovation. Journal of Accounting and Economics, 78(2–3), 101720. https://doi.org/10.1016/j.jacceco.2024.101720 DOI: https://doi.org/10.1016/j.jacceco.2024.101720

Nonnis, A., Bounfour, A., & Kim, K. (2023). Knowledge spillovers and intangible complementarities: Empirical case of European countries. Research Policy, 52, 104611. https://doi.org/10.1016/j.respol.2022.104611 DOI: https://doi.org/10.1016/j.respol.2022.104611

Venturini, R., Ceccagnoli, M., & van Zeebroeck, N. (2019). Knowledge integration in the shadow of tacit spillovers: Empirical evidence from U.S. R&D labs. Research Policy, 48(1), 180–205. https://doi.org/10.1016/j.respol.2018.08.007 DOI: https://doi.org/10.1016/j.respol.2018.08.007

Belderbos, R., Carree, M., Lokshin, B., & Fernández Sastre, J. (2015). Inter-temporal patterns of R&D collaboration and innovative performance. The Journal of Technology Transfer, 40(1), 123–137. https://doi.org/10.1007/s10961-014-9332-4 DOI: https://doi.org/10.1007/s10961-014-9332-4

Zhong, X., & Li, Y. (2024). Does micro-geographical proximity matter for knowledge spillovers? Evidence from the quasi-natural experiment of university relocation in China. Applied Geography, 173, 103449. https://doi.org/10.1016/j.apgeog.2024.103449 DOI: https://doi.org/10.1016/j.apgeog.2024.103449

Hegde, D., Herkenhoff, K., & Zhu, C. (2023). Patent publication and innovation. Journal of Political Economy, 131(7), 1845–1903. https://doi.org/10.1086/723636 DOI: https://doi.org/10.1086/723636

Hanley, D., Li, J., & Wu, M. (2022). High-speed railways and collaborative innovation. Regional Science and Urban Economics, 93, 103717. https://doi.org/10.1016/j.regsciurbeco.2021.103717 DOI: https://doi.org/10.1016/j.regsciurbeco.2021.103717

Ertugrul, M., Krishnan, K., & Yu, Q. (2024). Knowledge spillover and entrepreneurship: Evidence from BITNET. Research Policy, 53, 105091. https://doi.org/10.1016/j.respol.2024.105091 DOI: https://doi.org/10.1016/j.respol.2024.105091

Shi, Y., Zhai, W., Yan, Y., & Wang, X. (2024). The influence of proximity on the evolution of urban innovation networks in Nanjing metropolitan area, China: A comparative analysis of knowledge and technological innovations. *ISPRS International Journal of Geo-Information, 13*(8), 273. https://doi.org/10.3390/ijgi13080273 DOI: https://doi.org/10.3390/ijgi13080273

Mowery, D. C., & Ziedonis, A. A. (2015). Markets versus spillovers in outflows of university research. Research Policy, 44(1), 50–66. https://doi.org/10.1016/j.respol.2014.07.019 DOI: https://doi.org/10.1016/j.respol.2014.07.019

Agrawal, A., McHale, J., & Oettl, A. (2019). Does scientist immigration harm US science? An examination of the knowledge spillover channel. Research Policy, 48(5), 1248–1259. https://doi.org/10.1016/j.respol.2019.01.005 DOI: https://doi.org/10.1016/j.respol.2019.01.005

Feng, L., Huang, D., Chen, F., & Liao, F. (2024). Leveraging climate risk disclosure for enhanced corporate innovation: Pathways to sustainable and resilient business practices. International Review of Financial Analysis, 96, 103724. https://doi.org/10.1016/j.irfa.2024.103724 DOI: https://doi.org/10.1016/j.irfa.2024.103724

Zhang, M., Liu, S., & Gao, B. (2024). Double-edged effects of innovation culture on firm innovation performance: Evidence from management disclosures and employee reviews. IEEE Transactions on Engineering Management, 71, 7768–7781. https://doi.org/10.1109/tem.2024.3384254 DOI: https://doi.org/10.1109/TEM.2024.3384254

Audretsch, D. B., & Lehmann, E. E. (2005). Does the knowledge spillover theory of entrepreneurship hold for regions? Research Policy, 34(8), 1191–1202. https://doi.org/10.1016/j.respol.2005.03.012 DOI: https://doi.org/10.1016/j.respol.2005.03.012

Luintel, K. B., & Khan, M. (2017). Ideas production and international knowledge spillovers: Digging deeper into emerging countries. Research Policy, 46(10), 1738–1754. https://doi.org/10.1016/j.respol.2017.07.009 DOI: https://doi.org/10.1016/j.respol.2017.07.009

Agarwal, S., & Hauswald, R. (2010). Distance and private information in lending. Review of Financial Studies, 23(7), 2757–2788. https://doi.org/10.1093/rfs/hhq001 DOI: https://doi.org/10.1093/rfs/hhq001

Kubick, T. R., & Lockhart, G. B. (2016). Proximity to the SEC and stock price crash risk. Financial Management, 45(2), 341–367. https://doi.org/10.1111/fima.12122 DOI: https://doi.org/10.1111/fima.12122

Pirinsky, C., & Wang, Q. (2006). Does corporate headquarters location matter for stock returns? Journal of Finance, 61(4), 1991–2015. https://doi.org/10.1111/j.1540-6261.2006.00895.x DOI: https://doi.org/10.1111/j.1540-6261.2006.00895.x

Figueiredo, O., Guimarães, P., & Woodward, D. (2015). Industry localization, distance decay, and knowledge spillovers: Following the patent paper trail. Journal of Urban Economics, 89, 21–31. https://doi.org/10.1016/j.jue.2015.06.003 DOI: https://doi.org/10.1016/j.jue.2015.06.003

Isaksson, O. H. D., Simeth, M., & Seifert, R. W. (2016). Knowledge spillovers in the supply chain: Evidence from the high-tech sectors. Research Policy, 45(3), 699–706. https://doi.org/10.1016/j.respol.2015.12.007 DOI: https://doi.org/10.1016/j.respol.2015.12.007

Jaffe, A. B., Trajtenberg, M., & Henderson, R. (1993). Geographic localization of knowledge spillovers as evidenced by patent citations. Quarterly Journal of Economics, 108(3), 577–598. https://doi.org/10.2307/2118401 DOI: https://doi.org/10.2307/2118401

Battke, B., Schmidt, T. S., Stollenwerk, S., & Hoffmann, V. H. (2016). Internal or external spillovers—Which kind of knowledge is more likely to flow within or across technologies? Research Policy, 45(1), 27–41. https://doi.org/10.1016/j.respol.2015.06.014 DOI: https://doi.org/10.1016/j.respol.2015.06.014

Ahamed, M. M., Luintel, K. B., & Mallick, S. K. (2023). Does local knowledge spillover matter for firm productivity? The role of financial access and corporate governance. Research Policy, 52, 104837. https://doi.org/10.1016/j.respol.2023.104837 DOI: https://doi.org/10.1016/j.respol.2023.104837

Baum, C. F., Lööf, H., Stephan, A., & others. (2022). Innovation by start-up firms: The role of the board of directors for knowledge spillovers. Research Policy, 51, 104375. https://doi.org/10.1016/j.respol.2021.104375 DOI: https://doi.org/10.1016/j.respol.2021.104375

Obschonka, M., Tavassoli, S., Rentfrow, P. J., Potter, J., & Gosling, S. D. (2023). Innovation and inter-city knowledge spillovers: Social, geographical, and technological connectedness and psychological openness. Research Policy, 52, 104849. https://doi.org/10.1016/j.respol.2023.104849 DOI: https://doi.org/10.1016/j.respol.2023.104849

Rodríguez-Gulías, M. J., Rodeiro-Pazos, D., & Fernández-López, S. (2017). The effect of university and regional knowledge spillovers on firms’ performance: An analysis of the Spanish USOs. International Entrepreneurship and Management Journal, 13(1), 191–209. https://doi.org/10.1007/s11365-016-0399-2 DOI: https://doi.org/10.1007/s11365-016-0399-2

Kang, Y., Liu, R., & Yang, B. (2025). Bridging the ivory tower and industry: How university science parks promote university-industry collaboration? Research Policy, 54, 105241. https://doi.org/10.1016/j.respol.2025.105241 DOI: https://doi.org/10.1016/j.respol.2025.105241

Rossi, F., De Silva, M., Pavone, P., Rosli, A., & Yip, N. K. T. (2024). Proximity and impact of university–industry collaborations: A topic detection analysis of impact reports. Technological Forecasting and Social Change, 205, 123473. https://doi.org/10.1016/j.techfore.2024.123473 DOI: https://doi.org/10.1016/j.techfore.2024.123473

Bellstam, G., Bhagat, S., & Cookson, J. A. (2021). A text-based analysis of corporate innovation. Management Science, 67(7), 4004–4031. https://doi.org/10.1287/mnsc.2020.3682 DOI: https://doi.org/10.1287/mnsc.2020.3682

Gounopoulos, D., Huang, W., & Yang, M. (2025). Innovation and annual report readability. Research Policy, 54(1), 105301. https://doi.org/10.1016/j.respol.2025.105301 DOI: https://doi.org/10.1016/j.respol.2025.105301

Chen, J., & Roth, J. (2024). Logs with zeros? Some problems and solutions. The Quarterly Journal of Economics, 139(2), 891–936. https://doi.org/10.1093/qje/qjad054 DOI: https://doi.org/10.1093/qje/qjad054