Digital Infrastructure and Urban Innovation Capacity Under a Quasi-Natural Experiment

Digitalization is reshaping how knowledge is created and diffused within cities. Exploiting the staggered implementation of the Broadband China policy, this study examines the impact of digital infrastructure development on urban innovation capacity using panel data for 77 prefecture-level cities in the Yellow River Basin from 2010 to 2021. Treating the policy as a quasi-natural experiment, we employ a staggered difference-in-differences design to identify its effects. The results show that digital infrastructure development significantly enhances urban innovation capacity, with these findings remaining robust across multiple placebo and robustness tests. The effects are more pronounced in economically developed and large cities, indicating substantial heterogeneity in policy outcomes. Further analysis suggests that urban entrepreneurial activity strengthens the positive effect of digital infrastructure on urban innovation. By combining a staggered policy design with heterogeneity and mechanism analyses, this study provides new evidence on how digital infrastructure supports urban innovation.