Officials geographical rotation, knowledge spillovers and coordinated development of regional innovation

This paper employs officials geographical rotation as a quasi-natural experiment and integrates the firm-pair patent citation spatiotemporal data to measure innovation knowledge spillovers. We examine how the official geographical rotation affects the firm-pair innovation knowledge cross-regional spillover by accounting for geographical distance, industrial structure, and cultural differences. Multi-period DID results indicate that rotating mayors or municipal party secretaries to new position significantly boosts the innovation knowledge cross-regional spillover from listed firms in their current position to those in their previous position. This result fosters more balanced innovation growth across regions and remains consistent even after various robustness tests. Mechanism test shows that officials geographical rotation promotes the innovation knowledge spillover by reducing information costs and breaking down market segmentation. Channel analysis reveals that officials geographical rotation supports interfirm knowledge spillovers through their cross-regional activities. Furthermore, heterogeneity test demonstrates that the firm pair in coastal regions and medium-to-high technology industries, with closer government-business connections, the stronger the knowledge spillover effect of officials geographical rotation. Economic consequence reveals that the knowledge spillover effect of officials geographical rotation helps narrow city-pair innovation gap, promotes interregional innovation capabilities coordinated development, and further drives the innovation performance and quality improvement in underdeveloped regions, with this facilitating effect being sustainable. Our paper enriches research on factors influencing innovation knowledge spillovers. Based on the perspective of intergovernmental relationship networks built by individual officials, it provides important literature support for breaking regional innovation barriers and promoting coordinated development of regional innovation.