Higher education, entrepreneurial vitality, and high-quality economic development

This study investigates how higher education contributes to high-quality economic development (HQD) in China, focusing on entrepreneurial vitality as a transmission mechanism. Analyzing panel data from 288 Chinese cities over 2006 to 2023 through city and year fixed effects models, we demonstrate that higher education substantially enhances HQD by strengthening human capital, fostering innovation, and enabling sustainable growth trajectories. Entrepreneurial vitality, operationalized as new enterprise formation, emerges as an essential channel through which educational expansion translates into superior economic outcomes, with mediation analysis showing approximately one tenth of higher education's beneficial influence flows through heightened entrepreneurial activity. Extensive robustness checks including alternative specifications, varied samples, different temporal windows, and rigorous endogeneity analyses employing instrumental variables, propensity score matching, and Heckman selection models consistently validate these relationships. Heterogeneity analyses reveal substantial institutional moderation: cities with Mass Entrepreneurship and Innovation demonstration bases exhibit education impacts four times larger than non-demonstration cities, while innovation pilot cities demonstrate stronger complementarities between education expenditure and development quality, suggesting entrepreneurship-focused policies amplify educational benefits more effectively than broad regional strategies. Results also indicate that rapid economic expansion and unchecked population growth may undermine development quality absent sustainability-focused governance, with negative effects particularly pronounced in cities lacking entrepreneurial infrastructure. These findings advance scholarly understanding by clarifying pathways connecting educational investment, entrepreneurial dynamism, and regional prosperity while demonstrating how policy environments shape these relationships. The evidence supports policy priorities of strengthening higher education infrastructure, cultivating vibrant entrepreneurial ecosystems through targeted institutional support, and pursuing balanced development strategies emphasizing policy complementarities, as educational investments generate substantially greater developmental returns when combined with entrepreneurship support mechanisms.