Firm Entry and the Growth of The Science Parks based on Energy Innovation: Evidence from Beijing Zhongguancun Science Park in China

Abstract

Understanding the micro-level dynamic mechanism of economic growth of the science park is of great significance to the theory of regional economics and the policies to promote innovation. Based on the novel firm-level data from 2005 to 2015 on Beijing Zhongguancun Science Park (Z Park for short) in China, this paper investigates the dynamic impacts of firm entry on Z Park’s growth, measured by productivity and size, respectively, and an extended analysis is conducted from the perspective of energy utilization and innovation. By employing the DOP and EEKT decomposition methods, we first find that new entrants have a lower TFP and output than incumbent firms. However, in the following years, the relative growth rates of them are faster and gradually converge to or even exceed the latter in both the TFP and output level. Second, the new enterprises do not significantly promote the annual TFP growth of Z Park in the year of entry but finally enhance the TFP growth on average during these ten years. Third, different from the impact on the growth of TFP in Z Park, new entrants contribute substantially to the annual output growth of Z Park in the year of entry, and this effect has further increased on average. The analysis combined with energy utilization shows that with the entry and growth of new enterprises, they are gradually showing potential in improving energy efficiency and innovating energy technology. These findings provide valuable insights into the dynamics of economic growth in science parks and suggest potential strategies for promoting innovation for policymakers.