On innovation capitalization: Empirical evidence from Guangzhou, China

With the innovation-oriented transformation of the global economy, innovation and the knowledge-based economy have become two of the most distinguishing features of urbanization. The relationship between innovation and urban space has attracted considerable attention in existing theoretical research. However, little is known about the capitalization of innovation. Based on the capitalization hypothesis and hedonic price theory, we develop the concept of innovation capitalization and elaborate its mechanism. Based on housing data of 1668 communities in Guangzhou, a combination of the spatial regression model and the geodetector method were applied to confirm that innovation has a capitalization effect. This research is among the first attempts to quantitatively test the capitalization effect of innovation. The spatial regression results indicate that the innovation has significant positive impact on housing prices. The geodetector results indicate that innovation has an important impact on the spatial heterogeneity of housing prices. This research has critical theoretical and empirical value. We argue that from the innovation capitalization perspective, our understanding of the relationship between innovation and urban space can be deepened and that the impact of innovation on urban space development can be quantified, which can further help us understand the important role that innovation plays in urbanization and urban space development. ●The concept of innovation capitalization is developed, and the impact of innovative resources on housing prices is quantified.●Innovation affects housing prices through the upgrading of the built environment and the gentrification effect.●Innovation has a significant positive impact on housing prices with a high capitalization rate.●Innovation affects the spatial heterogeneity of housing prices with a high impact intensity, second only to the distance between housing and the central business district (CBD) but higher than other traditional housing properties.