Effects of the Talent War on Urban Innovation in China: A Difference-in-Differences Analysis

Talent is an important strategic resource for regional economic development. Based on the background of "the talent war" that has broken out between various cities in recent years, this study empirically verified the influence of the talent policy on urban innovation in 277 prefecture-level cities in China from 2010 to 2019 using the multi-period difference-in-differences model. The results indicated that "the talent war" caused by the talent policy has positively influenced urban innovation, causing, for instance, a dramatic increase in the number of patents for inventions. Among the subsidy methods of "the talent war" policy, the employment and entrepreneurship subsidy had the greatest incentive effect on urban innovation, followed by the talent housing subsidy. Moreover, the "the talent war" policy exerted a positive impact on urban innovation by improving the innovation willingness of cities and the level of talent gathering. At present, "the talent war" cities have, to a certain extent, restrained the improvement of urban innovation in neighboring cities because of the siphon effect, resulting in the division of the regional labor market. A heterogeneity analysis showed that "the talent war" has significantly promoted substantive innovation and the development of coastal cities with a better business environment and a higher degree of intellectual property protection.