More than a New Campus : University's Spatial Expansion, Emerging Knowledge Cluster, and Innovation Growth

This paper provides empirical evidence on the role of university spatial expansion in local innovation activities in the context of new campus construction in China. By treating the spatial expansion of the university as a quasi-experiment, we construct a unique geocoded dataset linking district-university-campus-firm and employ a time-varying difference-in-difference approach as the identification strategy. Our findings support the causality between new campus construction and innovation growth, with patent applications rising by 1.6 percent at the district and county levels and average treatment effects between 1.21% and 1.49% for firms located within a 20 km radius. The channels of knowledge spillover from the new campus to the firm are the university-firm collaborative innovation and the citation of university patents by firm. Furthermore, our research also reveals that the new campus not only brings a knowledge cluster to the area but also creates an emerging innovation cluster by stimulating the innovation potential of incumbent firms and attracting innovative entrants