Xiaoyu Xia, University of Essex
Title: “Local innovation through investment in education: Evidence from Chinese cities”
(with Enrico Moretti and Kenneth Huang) [paper not yet available].
This paper studies the driving force behind China's surging patent production. We use cross-city variations in China's college enrollment expansion from 1999 to 2010 to isolate exogenous shocks in a city's skill mix. By combining patent data provided by the State Intellectual Property Office and city-level skill mix information from the Census, we find robust and economically significant evidence that as the population share of college graduates rises in a city, so does a city's approved patents per capita, share of scientists and share of high-tech workers. When separating patents by their related fields of study, we find that more enrollment in the fields of engineering, science, agriculture and medicine increase related patents and boost corresponding industry growth in a city. Our empirical results suggest that a policy aimed at substantially increasing the access to college education in a region can stimulate invention within that region.