Examines the influence of regional water availability on firm innovation, suggesting integrated water management approaches.
Drawing upon China’s South-North Water Transfer Project as a case study, this rigorous inquiry elucidates the heretofore uncharted dimensions linking regional water availability to firm innovation. This study posits that improving regional water availability acts as a significant driver of economic vitality, effectively promoting firm innovation. In addition, trade openness can strengthen the effect of regional water availability on firm innovation. Finally, this study highlights that regional water availability can affect firm innovation by altering human capital and industrial agglomeration. Therefore, human capital and industrial agglomeration are crucial for regional water availability to affect firm innovation. This study recalibrates perceptions regarding water’s multifaceted contributions to firm innovation, urging policymakers to embrace integrated approaches to water stewardship.
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Sheng et al. (2026) studied this question.
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