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City: A Quasi-Experimental Study of  

Newly Built Campuses of Colleges and 

Universities in China

Dongyang Chen,
 
Wei Ha 

 
Institute of Economics of Education, Peking University, Beijing 100871, 

China 

 

Abstract: Colleges and universities have been playing an increasingly 

important role in regional innovation-driven development. Based on 
panel data (1999-2016) of 287 cities in China, this study conducted an 

empirical analysis of the influences of the new campuses which were 

built for the expanded college enrollment on the city’s patentable 
inventions and innovations. The Time-varying DID model was adopted 

in the analysis. The regression results demonstrate that newly built 
campuses have boosted inventions and innovations in their cities, 

benefiting various innovators including individuals and firms; that the 

impact of newly built campuses increases over time; the newly built 
campuses of vocational colleges have mainly influenced innovation 

actors like businesses, while those of regular colleges and universities 
have impacted both individuals and organizations; that the new campus 

built in the different city from its headquarter exerts greater promoting 

effects on the innovation of the city than the campus relocated in the 
original city and the campus of a newly established university; that the 

indirect effect of newly built campuses on the invention of all innovation 

actors is more significant than the impact of their direct collaboration 
with the latter; that a newly built campus have a more prominent effect 

on regional innovation when it is situated in an area with a high 
concentration of universities; and that the existence of the old campus of 

a university amplifies the promoting effect of its newly built campus on 

local innovation and the amplifying function strengthens over time. 

Best Evidence in Chinese Education 2022; 12(2):1635-1642. 

Doi: 10.15354/bece.22.ab015 



Chen & Ha. (Beijing). Universities and Innovation Potential of the City. 

BECE, Vol.12, No.2, 2022 1636 

How to Cite: Chen, D., & Ha, W. (2022). Universities and innovation potential of the 

city: A quasi-experimental study of newly built campuses of colleges and universities 

in China. Best Evidence in Chinese Education, 12(2):1635-1642. 

Keywords: Colleges and Universities, Innovation of the City, Newly Built Campuses 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

Correspondence to: Wei Ha, Institute of Economics of Education, Peking University, Beijing 100871, China. E-

mail: wha@pku.edu.cn  

Conflict of Interests: None. 
 

© 2022 Insights Publisher. All rights reserved. 

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the 

Creative Commons Attribution-Non Commercial 4.0 License 

(http://www.creativecommons.org/licenses/by-nc/4.0/) which permits non-commercial use, reproduction and distribution of 

the work without further permission provided the original work is attributed by the Insights Publisher. 

mailto:wha@pku.edu.cn
http://www.creativecommons.org/licenses/by-nc/4.0/


Chen & Ha. (Beijing). Universities and Innovation Potential of the City. 

BECE, Vol.12, No. 2, 2022 1637 

 

Introduction 

As a result of the intensified reform of market-oriented economy, serving economic 

development, undertaking scientific research, and training talent have been equally em-

phasized in China’s higher education. The predominance of higher education institu-

tions in the nation’s scientific research and innovation has been well acknowledged. 

Universities’ role in social development was further confirmed by a succession of ex-

ternal policies such as the National Revitalization through Science and Education Strat-

egy 1995, the Action Plan for Revitalizing Education in the 21st Century and the Na-

tional Key Basic Research Development Plan (the “973 Plan”) in 1998, and the em-

powerment of universities in patent applications in 2002.  

Over the past twenty years, local governments have committed substantial in-

vestment to constructing additional campuses in response to the expansion of college 

enrollment. At the same time, they have also attempted to utilize this opportunity to 

open up more zones for innovation such as high-tech development parks and innovation 

incubation bases to achieve innovation-driven regional development. Their plans for 

college town construction unexceptionally revealed their policy intention to integrate 

local higher education resources, promote the collaboration between industry, education, 

and research sectors, and develop regional high-tech industries to meet the future chal-

lenges of knowledge economy. According to the relevant statistics, among more than 

300 major cities (excluding those in Qinghai and Tibet) in China, 209 of them are build-

ing new college towns. Can so extensive construction of new campuses really drive the 

development of regional innovation? What are the underlying influential mechanisms? 

Research Hypotheses 

The newly built college and university campuses in this study refer to those built in the 

wake of the expansion of college enrollment initiated in 1999. According to the data 

collected by our research team, by 2021 there were over 1600 new campuses of various 

types under construction or completed by colleges and universities in 29 provincial ad-

ministrative regions (except for Qinghai and Tibet) in mainland China. Further classifi-

cation of these new campuses is made as follows. Regarding school types, there were 

925 new campuses for regular colleges and universities and 693 for vocational colleges. 

The construction of new campuses by regular colleges and universities reached its peak 

in three to five years following the initiation of expanded colleges’ enrollment in 1999, 

while the number of new campuses of vocational colleges grew steadily. According to 

their locations, these new campuses can be divided into three categories: there were 377 

“newly established campuses”, each of which was built as the first campus of its newly 

set up school; there were 1091 “relocated campuses in the original cities” which refer to 

those built in the same cities as the old campuses; there were 150 “relocated campuses 

in new cities” that were built in cities other than the ones where the parent campuses are 

located. The construction of “relocated campuses in the original cities” and “newly es-

tablished campuses” was at its peak in three to five years after the introduction of ex-

panded college enrollment. After that, the “relocated campuses in the original cities” 



Chen & Ha. (Beijing). Universities and Innovation Potential of the City. 

BECE, Vol.12, No. 2, 2022 1638 

 

has maintained a high growth rate, while the increase of “newly established campuses” 

has shown a significant downward trend. 

First of all, according to the existing experience, the operation of the newly 

built campus can not only promote the invention of the university itself, but also en-

hance the innovation ability of other actors such as businesses and individuals, through 

face-to-face communication between the school and firms, scientific and technological 

service, application of research results, popularization of cutting-edge expertise, and 

creation of innovative atmosphere. Thus, we propose the first hypothesis (H1): the op-

eration of new campuses of colleges and universities can effectively promote the inno-

vation of the city where they are built, and the influence can spill over into other inno-

vation agents such as enterprises and individuals. 

Second, newly built campuses of different types and location characteristics 

yield different knowledge spillovers and research transfer results to innovation actors in 

the local city due to their varying backgrounds and educational orientations. Therefore, 

we put forward hypothesis two (H2): the impact on the city’s innovation from newly 

built campuses of regular universities and vocational colleges may differ; also, there 

may be differences in the impact between “newly established campuses”, “relocated 

campuses in the original cities”, and “relocated campuses in new cities.”    

Third, there are time gaps between innovation input and output in the process 

of adjusting and transforming production factors by innovation actors. In the operation 

of new campuses, innovative elements spill over in the material or immaterial forms. In 

this process, learning, digestion, absorption, and diffusion of innovative elements by 

innovation actors are significantly dynamic. Most importantly, the construction and 

opening of new campuses are long-term processes in real-world contexts. As a result, 

we bring up the third hypothesis (H3): The positive effect of the new campuses of col-

leges on the city’s innovation is cumulative, which gradually increases over time. 

Last, newly built college campuses can influence external innovation actors 

such as firms and individuals through collaborative invention or through promoting the 

latter’s innovation practices by providing knowledge service. The second influencing 

path plays a more salient role in boosting patentable inventions in the city. Hence, the 

fourth hypothesis is suggested: the newly built college campuses are more likely to im-

pact external actors’ innovation through indirect involvement than through direct coop-

eration with them. 

Research Models 

Based on the existing panel data, this study constructed a difference-in-differences 

(DID) model to investigate the impact of the newly built college campuses on the city’s 

innovation capacity. The traditional DID method is generally valid to cases in which the 

policy intervention occurs in a single period of time and the sample intervention status 

remains unchanged, otherwise the setting of interactions will severely contradict the 

parallel trend assumption, which may lead to biased estimation coefficients. As a result, 

we used a more flexible Time-varying DID model instead of the conventional DID 

model in this study, since there are differences in the opening time among those new 

campuses and in the number of new campuses built in sampled cities. 

 



Chen & Ha. (Beijing). Universities and Innovation Potential of the City. 

BECE, Vol.12, No. 2, 2022 1639 

 

A requirement for using DID method is that the experimental group meets the 

criterion of random distribution. In other words, there are no other potential time-

varying characteristics of cities that may affect the estimation results in the model. This 

study managed to control for the key indicators that may affect the city’s construction 

of new campuses such as economic foundation, population size, the number of existing 

campuses and the interactions of time trend, etc. and add fixed effects of the city and 

fixed effects of the year. It also attempted to avoid the interference from other imper-

ceptible omitted variables in the estimation results.  

The other requirement for using DID method is that the innovation activities of 

the experimental group and the control group be aligned with the parallel trend assump-

tion. This study further combined the preliminary Time-varying DID model with the 

event study method. A parallel trend test was conducted by observing the difference in 

the impact of the two groups of samples before the intervention; the research hypothe-

ses were verified by inferring the trend from the dynamic changes of the policy effects. 

Research Findings 

Preliminary Regression Results 

Preliminary regression results from equation one of the model demonstrated that the 

operation of newly built campuses of universities has significantly promoted innovation 

in the cities where they are located. The regression coefficient of the effect was 0.020, 

that is, on average, each new campus brought about 2.0% increase in patented inven-

tions for the city. The regression results showed that the regression coefficients of the 

effects of newly built university campuses on individuals, enterprises, colleges, research 

institutions and other actors were all positive, and the first three coefficients are statisti-

cally significant. This indicates that the knowledge spillover of the new campuses is not 

limited to the higher education sector but can also affect the innovation activities of 

external factors, such as businesses and individuals. Thus, H1 is validated.  

To check the interference caused by the non-random distribution of newly built 

college campuses in various cities, this study proceeded to perform a robustness test by 

focusing on cities with newly built university campuses and incorporating fixed effects 

of provinces and years and found that the regression results of the test were consistent 

with the preliminary regression results. This shows that the impact of newly built uni-

versity campuses on the city’s innovation is robust. 

To evaluate the potential impact of the possibly, randomly omitted variables on 

the empirical research conclusions, this study also conducted a placebo test: randomly 

selected the cities from the experimental group and the opening years of their new cam-

pus, and randomly regressed 1000 times according to the preliminary model. According 

to the regression results, the regression estimation coefficients obtained by random 

sampling are by no means close to the regression results of this study. Thus, the regres-

sion results of this article cannot be affected by randomly changing the policy interven-

tion time. 

Disparities in the Impact of Newly Built Campuses 



Chen & Ha. (Beijing). Universities and Innovation Potential of the City. 

BECE, Vol.12, No. 2, 2022 1640 

 

(i) Differences in the Influence of Newly Built Campuses 

of Different Types 

We attempted to replace the core explanatory variables in the preliminary regression 

model with the numbers of newly built campuses by regular universities and by voca-

tional colleges to compare the difference in their impact on the local cities’ innovation. 

It was found that the two types of new campuses both had significant positive effects on 

the number of inventions and patents in the local cities. New campuses of regular uni-

versities mainly affect the innovation of individuals, businesses, and tertiary education 

schools, while those of vocational colleges generally influence the invention of busi-

nesses and tertiary education schools. Both of them have a positive impact on corporate 

innovation, and the impact of the latter is slightly stronger than that of the former in this 

regard; Regular universities exerts more prominent influence on individuals’ invention 

and innovation. 

(ii) Variations in the Impact of Newly Built Campuses 

with Different Locations 

We tried to replace the core explanatory variables in the preliminary regression model 

with the numbers of “newly established campuses”, “relocated campuses in the original 

cities”, and “relocated campuses in new cities” to examine the gaps in their effects on 

the cities’ innovation. It was discovered that the impact of “relocated campuses in new 

cities” was the strongest, which was mainly imposed on the invention of businesses and 

individuals; and that there is no significant difference in the effects on the cities’ inno-

vation between “newly established campuses” and “relocated campuses in the original 

cities” and the effects are posed on individuals, businesses and tertiary education 

schools. 

The Cumulative Effects of Time 

After controlling for the covariates, there was no perceptible difference between the 

experimental group and the control group before the intervention, and the “counterfac-

tual” estimation in the model was basically reliable. The analysis results also showed 

that the impact of the new campuses on the innovation capacity of the city gradually 

increased over time, in a cumulative pattern. 

An Expanded Analysis of Influencing Mechanisms 

There may exist multiple paths for the influence of newly built college campuses on the 

innovation of their cities. On the basis of foregoing regression results, this study further 

examined the comprehensive influence of the new campuses on the patentable innova-

tions of the city in the following four aspects. 

• Direct Collaboration or Indirect Involvement 



Chen & Ha. (Beijing). Universities and Innovation Potential of the City. 

BECE, Vol.12, No. 2, 2022 1641 

 

In order to determine which form of engagement on part of the newly built college 

campuses, direct cooperation or indirect involvement, has the more substantial promot-

ing effect on the innovation of the city, we experimented with replacing the explanatory 

variables in the regression model with the number of invention patents under universi-

ties’ direct participation and the number of invention patents which did not involve uni-

versities’ direct engagement, and then a grouped regression was carried out. The results 

revealed that the indirect involvement rather than the direct engagement of new cam-

puses yields a more substantial promoting effect on the local city’s innovation and de-

velopment.  

• Converging Inventions or Balanced Development 

This study first used as the proxy indicator the logarithm of the difference between the 

90% quantile and the 10% quantile of the number of invention patents granted to all 

districts and counties within a city to examine the degree of concentration and distribu-

tion of innovation activities among different areas in the city after the new campuses 

were put into operation. The results showed that the estimated coefficients of each re-

gression equation were significantly positive, which indicated that innovation activities 

in various districts and counties in the city have shown a certain degree of convergence 

after the new campuses were put into use. Based on this finding, this study used the 

variance of the number of invention patents granted to each district and county as the 

regression result of the substitution index, which also verifies the above conclusion.  

• The Impact of the Concentration of Newly Built 

University Campuses 

The greater the number of university campuses in a unit area, the more likely that the 

innovation actor there will benefit from their knowledge spillovers, and the overall im-

pact of universities on the city’s innovation will be more significant. We attempted to 

replace the core explanatory variables in the preliminary model with the number of col-

lege campuses per hundred square kilometers to evaluate the influence of college densi-

ty on the city’s innovation and found that the denser the university campuses per unit 

area, the more prominent the knowledge spillovers on the overall invention and innova-

tion of the city, and that businesses there are the major beneficiaries.  

• The Influence of the Old Campuses  

We incorporated into model two the interaction between the number of new campuses 

and the variable of whether there being corresponding old campuses in the same city to 

examine the relationship between them and its long-term trend. Overall, the existence of 

the old campus somewhat reinforced the promoting effect of the new campus on the 

innovation and invention of the city, and this effect was consistently enhanced over 

time, which was a sign that the new and the old campus have gradually established a 

close connection in research cooperation. 

 



Chen & Ha. (Beijing). Universities and Innovation Potential of the City. 

BECE, Vol.12, No. 2, 2022 1642 

 

Conclusions 

The operation of newly built college campuses has promoted the innovation and inven-

tion of the city where they are located, including the invention of individuals, business-

es, and other actors. The promoting effect of the new campuses is cumulative, which 

strengthens with the increase in years of their operation. The newly built campuses of 

regular colleges and universities are beneficial for the innovation of individuals and 

businesses, while those of vocational colleges mainly benefit businesses and other ac-

tors. Compared with “newly established campuses”, “relocated campuses in the original 

cities”, “relocated campuses in new cities” can impose a more substantial impact on the 

city’s innovation. The expanded analysis shows that compared with their direct cooper-

ation with other innovation actors in the city, new campuses’ indirect involvement has 

more significant influences on the number of invention patents of those actors. After the 

new campuses being put into use, the innovation and invention activities in the city tend 

to converge; the higher density of college campuses is in a unit area, the stronger pro-

moting impact they have on the city’s innovation. The existence of old college campus-

es may enhance the promoting function of new campuses, and this enhancing effect will 

get stronger over time. 

 
 

 

The Chinese version of this article has been published in Peking University Education Review, 

20(2):127-146. The English version has been authorized for being publication in BECE by the 

author(s) and the Chinese journal. 

 

陈东阳,&哈巍. 高校与城市创新能力-基于新建校区的准实验研究.北京大学教育评论, 2022, 
20(2):127-146. 

 

 

Received: 11 October 2022 

Revised: 27 October 2022 

Accepted: 15 November 2022 

 

 

 

 

 


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