The Economic Empowerment Effect of Intangible Cultural Heritage: Causal Identification Based on Multi-Period DID and Historical Instrumental Variable

As the strategic role of cultural capital in regional development becomes increasingly prominent, evaluating the macroeconomic impact of National Intangible Cultural Heritage (ICH) policies necessitates rigorous causal identification. Based on a panel dataset of 286 Chinese prefectural-level cities from 2000 to 2019, this paper investigates the causal effect of the national ICH policy on urban per capita GDP utilizing multi-period Difference-in-Differences (DID) and Instrumental Variable (IV-2SLS) approaches. Our baseline estimates indicate that standard DID results are statistically insignificant due to a structural “negative selection bias”: cities confronting economic bottlenecks exhibit stronger endogenous incentives to seek ICH status for revitalization. To mitigate this endogeneity, we construct an instrumental variable by interacting a historical Confucian cultural endowment index (from the Ming and Qing dynasties) with a linear time trend. By controlling for modern secondary school enrollment to account for the human capital transmission channel—and providing supportive evidence for the plausibility of our identification strategy via Conley’s plausibly exogenous bounds and Hansen J overidentification tests—we find a robust positive policy effect: each additional national ICH item significantly increases a city’s per capita GDP by approximately 1.6%. Moreover, mechanism analysis based on absolute sectoral employment empirically refutes the conventional “hollow tourism” stereotype, revealing a pronounced secondary-sector employment expansion wherein each additional national ICH item increases secondary industry employment by 11.0%, more than quadrupling the 2.5% expansion in tertiary employment. Finally, full-sample interaction heterogeneity analyses reveal a pronounced “catch-up effect”: consistent with diminishing marginal returns, cities with relatively lagging initial economic and industrial foundations reap substantially larger marginal growth dividends (4.6% and 4.4%, respectively) than advanced regions. This study provides empirical evidence that cultural heritage, when properly leveraged, acts as an effective catalyst for real-economy structural transformation and regional convergence rather than a mere tourism asset.