How does China’s housing affordability affect urban innovation?

The primary objective of this paper is to examine the complex mechanisms governing the influence of housing supply-demand dynamics and affordability on urban innovation levels in China. Specifically, we dissect the interplay between housing affordability, human capital, and the intermediary pathways connecting them. Our empirical analysis reveals that an escalation in the housing supply-demand ratio inhibits urban innovation levels by traversing through the intermediary channels. Moreover, our investigation uncovers notable disparities in the chained intermediary effects between innovative and non-innovative pilot cities. In innovative pilot cities, an increase in the housing supply-demand ratio represses urban innovation levels, whereas, in non-innovative pilot cities, it augments them.