Therefore, this article aims to explore the question of whether commodities play a role in determining the geography of innovation in China. To answer this question, we offer several contributions to literature. First, this study focuses on the role of commodities in influencing China`s regional innovation, which has attracted surprisingly little scientific attention as commodities are seen as increasingly important as China becomes more and more prosperous. Second, the article is the first to discuss the heterogeneous effects of amenities at the city level, which is an extension of studies that examine the heterogeneous effects of amenities at the individual level. Thirdly, natural amenities and consumer facilities are taken into account. Due to concerns about the endogeneity of consumer institutions, previous studies have rarely included consumer institutions. However, by using a matching tool approach to address endogeneity issues, this paper considers both the impact of natural amenities and facilities for consumers. Since we use data at the city level, our findings are more applicable than the previous literature, which used primarily data at the provincial level (e.B. Sun 2000, 2003; Li 2009; Crescenzi et al., 2012; Fan et al., 2012; Fan 2014). Table 2 shows that sunshine is significantly associated positively with innovation outcomes, while air pollutants are negatively associated with regional innovation. Similarly, for natural equipment variables, only sunshine and air quality variables are significant.

There is no significant evidence that other climatic factors such as precipitation and humidity influence innovation. There is also no evidence that green equipment at the prefecture level has a statistically significant impact on innovation, which contrasts somewhat with the findings of Zheng et al. (2009). This implies that sunnier places have advantages in generating innovation. As a result, Chinese migration patterns are increasingly expected to become more similar to those of the late 1900s in the United States, when migration was heavily influenced by climate (Graves, 1980; Rappaport, 2007). Many empirical studies support such a commodity growth strategy. For example, Glaeser et al. (2001), Adamson et al. (2004) find a positive association between amenities and urban growth. Li et al. (2016) propose that high-growth enterprises exist in counties with higher levels of education and higher natural amenities.

All the comforts of life contribute to existence, not to life itself. In order to better interpret interaction effects, Fig. 2 shows both baseline and marginal effects. The term positive interaction between the approval index and GDP per capita shows that the marginal impact of equipment on innovation increases with GDP per capita (see Figures a.1 and a.2). The same is true for population density, as natural amenities and consumer facilities have a greater marginal impact on innovation as their density increases (see Figures c.1 and c.2). Similarly, the marginal impact of amenities is positively related to the increase in the city`s human capital (see Figure b). Using instrumental “matched city” variables, we then use two-level least squares (2SLS) to estimate the model (1). The IV matching approach is used to solve endogeneity problems caused by missing variables. Partridge et al.

(2017) adopted this approach to construct instrumental variables when no appropriate instrument is available. Theoretically, valid instruments must meet two basic conditions: (1) relevance, i.e. the instruments must be strongly correlated with the endogenous explanatory variable, and (2) exogenicity – i.e. the instruments must not be correlated with the error term. In our case, the equipment values of the appropriate cities can be ideal tools for the amenities of the underlying city, as the appropriate cities should have similar amenities that meet the first condition. Second, the corresponding cities are at least 200 km away, which means that the second condition would be met, as amenities for the corresponding cities are less likely to be correlated with shocks for the underlying city. Liu Y, Shen J (2014) Jobs or Amenities? Location Selection of Interprovincial Skilled Migrants in China, 2000-2005. Popul Space Place 20 (7): 592-605 The main features of what we define as amenities are those that can be judged most easily by local residents.

In China, some features stand out as important amenities that affect the choice of location of professionals, including primary and secondary schools, health services, etc. Since the 1980s, rural residents have moved to urban areas to get better careers and a better quality of life, while the supply of public services in cities has been strained to meet the growing demand of residents and new migrants. Therefore, local governments use the hukou registration system to erect barriers between those who hold local hukou and non-holders by allowing only local hukou holders full access to public services. Footnote 6 Although hukou status is no longer a restriction on job search in cities, it remains an important tool for rationing access to local public services such as schools, health care and social services (Zheng and Kahn 2013b). The scarcity of public service resources and the existence of the hukou system accurately reflect that the amenities associated with the hukou system are valuable to workers, especially the amenities in terms of good schools and quality health services. In contrast, environmental facilities such as green spaces, air quality, and consumer facilities such as public safety, universities, sports, tourism, and entertainment facilities and services are not exclusive to non-hukou owners. In general, this paper notes that commodities, as well as other drivers of innovation such as R&D inputs, human capital stocks and agglomeration economies, are all driving regional innovation and their impacts interact with each other. In particular, although the economies and amenities of agglomerations are not direct inputs in knowledge creation, they appear to stimulate the efficiency of input-output in their creation. All of these factors work together to shape the geography of patent innovation in China.

Of all the convenience factors considered, only amenities related to clean air, sun, public transportation, public education, and health services statistically influence city-level differences in Chinese innovation from 2007 to 2014. The impact of amenities also varies depending on the characteristics of the city such as economic prosperity, density and human capital, where these effects also vary depending on the type of equipment. In particular, the positive impact of amenities on regional innovation is greater in larger, wealthier cities and in cities with a critical mass of highly skilled workers. The economic literature also illustrates how labour productivity is influenced by air quality. For example, Zivin and Neidell (2012) suggest that ozone concentrations in the air affect those outside. By measuring changes in labour productivity, empirical studies in the United States, India and China suggest that pieceworker efficiency decreases on days when PM2.5 and SO2 air pollutant concentrations are higher (Adhvaryu et al., 2014; Chang et al., 2016; Er et al. 2018a, b). The detrimental effect of air pollutants on athletic performance provides other examples.

For example, German baseball athletes perform worse when atmospheric concentrations of CO, PM10 and PM2.5 increase (Lichter et al., 2017; Archsmith et al., 2018). Using a sample of more than 300,000 marathon runners in 55 events in 37 Chinese cities, Guo and Fu (2019) find that an increase in air pollution of one standard deviation slows down a runner`s time by 2.6 minutes. Therefore, we conclude that air quality is likely to influence R&D activity and innovation. Similarly, access to good schools, healthcare, restaurants, and cultural and historical facilities such as museums could have similar effects on innovation (although this is also an empirical issue). However, a potentially important factor in China`s regional innovation growth has been largely overlooked: the role of commodities in the development of innovative activities. As a key driver of quality of life, amenities are defined as site- or region-specific goods and services that impede regional attractiveness to the workforce (Mulligan and Carruthers, 2011). These amenities include the climatic characteristics, beauty and accessibility of the natural environment, landscape, utilities, safety or vibrancy of a region`s cultural environment (Roback, 1982; Gyourko & Tracy, 1991; Dalenberg and Partridge, 1997; Deller et al., 2001; Rappaport, 2007). Conversely, disadvantages are factors that make places unattractive, such as extreme weather, air pollutants, and crime. Since it was recognized that amenities are important factors for the location of households and businesses in industrialized countries (e.B.

Report 2007; Partridge, 2010) seems reasonable to assume that commodities can play an important role in defining the geography of innovation, especially if they are attractive to skilled workers. If highly skilled workers in the regions have low mobility and their bargaining power in the labour market is limited, it is unlikely that the regions will be affected by the convenience factors described above. Even then, there is another possible channel through which commodities affect regional innovation, that is, by affecting worker productivity. where ( {text{GDPpc}}}*{text{amenity}} ),( {text{humancap}}*{text{amenity}} ), ( {text{popu}}*{text{amenity}} ), and( {text{density}}*{text{amenity}} ) are the interaction variables described above. Accordingly, by examining the interaction coefficients, i.e. ( varvec{kappa}_{1} )., ( varvec{kappa}_{2} )., ( varvec{kappa}_{3} ), ( varvec{kappa}_{4} , ) we assess whether the marginal influence of amenities with specific characteristics of the city varies. For ease of interpretation, in these models we use the approval index variables described above instead of the individual approval variables (natural approval index and consumer approval index). .