Internal migration, diversity, and innovation: new evidence from the relaxation of migration barriers in China

The increasing number of migrants and the diversity they bring have played a crucial role in fostering innovation. However, existing studies primarily focus on international migrants and significant diversity in developed countries, with limited exploration in developing countries like China. Given China's large-scale internal migration and rich diversity, the country has experienced remarkable advancements in innovation, making it an ideal context to examine this issue. Using the household registration reform as a quasi-natural experiment in China, this study is among the first group to explore the impact of relaxing migration barriers on innovation from the mechanisms of migration and diversity in a developing country. The results show that reducing migration barriers can further enrich cultural diversity and skill diversity, thus promoting innovation in multiple ways. Our results suggest that internal migrants and diversity can contribute to innovation in developing countries, highlighting the importance of reducing migration barriers to foster innovation.