Intra-Institutional Innovation: A Study on the Relation-ship Between Institutional Change and Innovative Spatial Development in SEZ Cities—A Comparison Between Shenzhen and Xiamen

China’s economic growth through Special Economic Zones (SEZs) highlights the role of institutional incentives in its economic development. This study develops an analytical framework to explore how institutional change fosters urban growth and innovation, and examines the mechanisms through which institutional change drives growth and innovation. Moreover, it investigates “intra-institutional innovation” as a driver of market-oriented innovation. Employing empirical methods, including big data analysis, agglomeration indices, and social network analysis, the study examines innovation dynamics in the SEZ cities of Shenzhen and Xiamen. It further evaluates policy impacts and the formation of “innovation spatial units.” Comparative analysis reveals the following three main findings. First, Shenzhen has completed the cycle of “introduction–digestion–absorption–creation” and has advanced to a stage of comprehensive innovation development. Second, Xiamen remains at an early stage, with innovation activities largely concentrated locally. And third, institutional change and innovation cycles in SEZ cities contribute to the promotion of innovative development. However, differences in institutional, geographical, and cultural conditions lead to diverse innovation pathways.