Political Mobility and Dynamic Diffusion of Innovation: The Spread of Municipal Pro-Business Administrative Reform in China

Abstract

This article builds theoretical linkages between the political mobility of local officials and the dynamic diffusion of innovation in decentralized authoritarian China. We built two datasets consisting of city-level data on pro-business administrative licensing (business registration) reform and micro-level data on officials’ career histories in 281 Chinese cities between 1997 and 2012. By comparing empirical approaches between traditional event history analysis and piecewise constant exponential models, we determined that without central authority intervention, innovation adoption tended to be similar to an “economic decision” based on city characteristics. After the accession of China to the World Trade Organization, the mechanism of “neighboring diffusion” dominated the innovation adoption process. Otherwise, after the central authority promulgated the Administrative Permission Law in 2004, innovation adoption became similar to a “political decision” made by local officials concerned about their personal political mobility.