Agglomeration and innovation : evidence from skyscraper development in China

The effects of skyscraper development on surrounding firms' innovation in China is assessed in this paper, and empirical results show that skyscraper development significantly promotes the innovation of firms within 1 ​km of skyscrapers. However, such effect only exists around very tall skyscrapers in large cities. This means that skyscraper development in small cities often is unfit for the economic fundamentals of these cities, which may weaken the positive externalities generated by skyscrapers. The mechanism analysis in this paper shows that increased surrounding population density brought by skyscraper development and knowledge sharing between firms surrounding the skyscrapers and other firms in the same city are the main paths through which skyscrapers affect innovation.