The positive effects of the higher education expansion policy on urban innovation in China

Higher education not only enhances people's well-being, but also plays an important role in the in-depth implementation of the innovation-driven development strategy. In this paper, we use Chinese urban data for 1995–2020, utilizing the higher education expansion policy implemented in China in 1999 as an external shock. Using Double/Debiased Machine Learning (DML), we examine the impact of the aforementioned policy on urban innovation and its mechanisms. The results show that: (1) The higher education expansion policy significantly promotes urban innovation; (2) the policy promotes human capital expansion and strengthens government financial support, thereby significantly fostering urban innovation; (3) the impact of the policy varies across cities with different geographic locations, population densities and levels of marketization. Therefore, the findings of this paper provide empirical evidence that higher education expansion policy stimulates urban innovation. It also offers useful insights for China's transition from "Made in China" to "Created in China" during its high-quality development phase.