Summary:
Harmonious regional development and synergistic regional innovation have become the cornerstones for building the modern economic system in present China. Realistically, however, we need to coordinate not only the relationship between internal regional economic development and regional innovation, but also the spatial relations between interregional economic development and regional innovation. Researchers have neglected the reverse influence of regional innovation on economic agglomeration and the spatial interactions between interregional economic agglomeration and regional innovation. Based on actual needs and the deficiencies of previous studies, this study theoretically and empirically examines the interactive relationship between economic agglomeration and regional innovation and the spatial spillover effects. First, we analyze the interaction mechanism between economic agglomeration and regional innovation and the spatial spillover mechanism. Then, based on the data from 152 county-level administrative regions of China's Yangtze River Delta from 2000 to 2016, we verify the endogenous bidirectional effect between economic agglomeration and regional innovation and spatial spillover using the spatial simultaneous equation model and the generalized spatial three-stage least squares method (GS3SLS). Finally, by combining a mediation effect model, we test the reverse influence mechanism of regional innovation on economic agglomeration. The empirical results show a mutual promotion between economic agglomeration and regional innovation. Ignoring the reverse effect of regional innovation on economic agglomeration leads to significant overestimation of the promotive effect of economic agglomeration on regional innovation. Both economic agglomeration and regional innovation have significant spatial spillover and regional interaction effects, which means that local and neighborhood economic agglomeration significantly promotes local regional innovation, and local and neighborhood innovation significantly promotes local agglomeration. The boundary test of the spatial spillover effects shows that the spatial spillover and interaction effects of economic agglomeration and regional innovation both weaken with increasing distance. The spatial spillover effect of economic agglomeration and regional innovation is more apparent within 500 kilometers, while the regional integration effect is limited to within 400 kilometers. In other words, the effect of neighborhood economic agglomeration on local regional innovation and the effect neighborhood innovation on local economic agglomeration is limited to within 400 kilometers. Based on these empirical results, we further verify the reverse influence mechanism of regional innovation on economic agglomeration. The estimation result of the mediation effect model shows that regional innovation reacts to economic agglomeration through the effect of a growth pole, the effect of optimized industrial structure, and the innovation network. The main contribution of this paper is as follows. First, we systematically analyze the bidirectional influence between economic agglomeration and regional innovation and the regional interactive influence mechanism, especially by analyzing and verifying the reverse influence mechanism of regional innovation on economic agglomeration. Second, we consider and verify the spatial spillover effect of economic agglomeration and regional innovation. Third, we identify the geographical boundary of the spatial spillover effect of economic agglomeration, regional innovation, and their interactive influence. This study has important policy implications for coordinating economic development and regional innovation to build a regional innovation community. We argue that economic agglomeration and regional innovation can achieve a win-win situation. Regional development and regional innovation policies should be integrated and interconnected. A global strategy of economic development and regional innovation should be set up, and a mutually beneficial symbiotic pattern of regional development and innovation established. Both regional integration and the construction of an innovation community require such a win-win public interest platform.
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