How long do we wait to innovate? understanding causal relationships between economic and innovation performance with temporal lags: evidence from a dynamic panel of 282 cities in China.

This article examined the causal relationship between economic and innovation performance and the associated lag time within 282 prefecture-level cities in China. With the nighttime light (NTL) intensity representing economic status and 19 indicators comprehensively simulating the innovation performance index (CII), the Granger causality test was applied. The results showed that the temporal lag between economic status and innovation performance varies among cities. The innovation performance of 145 cities showed significant causal relationships with economic development in the ItoN test, and the average time lag was 2.01 years. The economic development of 137 cities also showed significance in innovation performance, with an average time lag of 3.15 years in the NtoI test. The growth rate of economic development and innovation performance has strongly impacted the temporal lag, especially in the ItoN causality test. A bidirectional causality between economic and innovation performance was found in 136 cities, but these cities complete the 'economy-innovation-economy' circle over a long period. Overall, this study concludes that the Granger causality test offers a useful approach to measure the time lag between economic and innovation performance, which can help better implement policies and expand research on economy and innovation. [ABSTRACT FROM AUTHOR]