The leading effect of developing countries’ capital cities in innovation: evidence from Chinese provincial capitals
Abstract
Motivated by the limited research on the role of capital cities in driving innovation within developing countries, this study used China as a sample to examine the relationship between Provincial Capitals’ Priority Development (PCPD) and Provincial Innovation Capacity (PIC). The findings revealed that PCPD significantly enhances PIC. Quantile regression further demonstrated the varying impact of PCPD at different stages of PIC. A lag effect was also identified, as evidenced by regressing lagged PCPD variables on PIC. Additionally, by incorporating interaction terms in the regression, we verified the positive moderating effects of industrial isomorphism, fiscal support for innovation, and higher education resources on the PCPD–PIC link. Finally, heterogeneity analysis indicated that PCPD initially benefits innovation primarily in provincial capitals; however, over time, its positive impact gradually extends to non-provincial capital cities. These findings offer insights for policymakers in developing countries seeking to foster innovation through the strategic prioritization of capital cities. First published online 14 May 2026