📈 economics

Impact of National Sports Industry Demonstration Bases on Regional Sports Development: Empirical Difference-in-Differences

Using a multi-period difference-in-differences approach on panel data from 208 Chinese cities, this study finds that while National Sports Industry Demonstration Bases significantly boost the regional sports industry's economic value, they have no significant impact on resident sports consumption or employment absorption, prompting recommendations for policy optimization in evaluation, employment transformation, and product supply.

Original authors: Wenxuan Gan, Qiulin Chen, Ying Liu

Published 2026-07-30

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CC BY 4.0

Original authors: Wenxuan Gan, Qiulin Chen, Ying Liu

Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). ✨ This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer

Imagine the economy as a giant, bustling city where different neighborhoods specialize in different things. Some areas are famous for making shoes, others for growing food, and some for creating fun games and sports gear. In this city, the government sometimes decides to pick a specific neighborhood and give it a special "Super Zone" badge. This badge comes with extra resources, better roads, and a promise that the government will help businesses there grow faster. This is called a "place-based policy." The big question economists have always asked is: Does giving a neighborhood this special badge actually make the whole city richer, create more jobs for the neighbors, and get people to spend more money on fun activities? It's like asking if putting a "Magic Garden" sign on a patch of grass actually makes the flowers grow bigger, attracts more bees, and makes the neighbors happier to walk through it.

This paper dives into that exact question, but with a very specific type of "Magic Garden": China's National Sports Industry Demonstration Bases. These are special zones set up to boost the sports business, from selling sneakers to hosting huge marathons. The researchers wanted to see if these zones actually worked as advertised. They didn't just guess; they used a clever statistical trick called "Difference-in-Differences." Think of it like a time-travel experiment where they compare cities that got the "Sports Super Zone" badge against cities that didn't, looking at how they changed before and after the badge was awarded. They looked at three main things: Did people buy more sports stuff? Did the sports businesses make more money? And did more people get hired to work in sports?

The story the data tells is a bit surprising, like finding out a magic spell only works on half the things you expected. The researchers looked at data from 208 Chinese cities between 2015 and 2023. They found that the "Sports Super Zones" were definitely successful at one thing: making the sports industry richer. The economic value of the sports businesses in these zones went up significantly. It's as if the magic garden really did make the flowers grow taller and produce more fruit. The study suggests that these zones act like a magnet, pulling in money, companies, and resources, which boosts the overall size of the sports economy in that area.

However, the magic spell didn't work the way everyone hoped for the other two parts of the story. First, despite the zones getting richer, the regular people living in those cities didn't suddenly start buying more sports equipment or paying for more gym memberships. The "resident sports consumption" didn't go up in a statistically significant way. It's like the garden is full of beautiful, expensive flowers, but the neighbors still aren't buying bouquets to take home. Second, and perhaps most surprisingly, the zones didn't create a massive wave of new jobs. The number of people hired in the sports industry didn't significantly increase because of the zones. The study suggests that while the businesses are making more money, they aren't necessarily hiring more people to do it. Maybe they are using better technology or focusing on high-value services that don't need as many workers, meaning the "growth" isn't the kind that fills up the local employment office.

So, what's the takeaway? The "Sports Super Zones" are great at building a strong, wealthy sports economy, but they haven't yet figured out how to translate that wealth into more spending by regular folks or more job openings for the community. The authors suggest that if the government wants these zones to be truly successful for everyone, they need to tweak the rules. They should focus on creating products that regular people actually want to buy and finding ways to make sure the growth in money leads to growth in jobs. It's a reminder that just because a garden is full of gold, it doesn't mean the neighbors are getting richer or finding work unless the gardener plans for that, too.

Technical Summary: Impact of National Sports Industry Demonstration Bases on Regional Sports Development

Problem Statement
China's sports industry is undergoing a structural transformation from extensive scale expansion to high-quality development characterized by service supply and industrial integration. While National Sports Industry Demonstration Bases have been established as a key institutional innovation to promote regional economic transformation, existing literature offers insufficient evidence regarding their specific causal impacts on the regional sports economy. Prior research has largely relied on single outcome variables at the macro or enterprise level, failing to provide a unified, multi-dimensional analysis of how these place-based policies affect resident consumption, industry economic value, and employment absorption simultaneously. Furthermore, there is a lack of systematic empirical evidence regarding the dynamic and lagged effects of staggered policy implementations.

Methodology
This study employs a quasi-natural experiment design, treating the staggered establishment of National Sports Industry Demonstration Bases as an exogenous policy shock. The research utilizes a multi-period Difference-in-Differences (DID) approach to evaluate policy effects across 208 Chinese cities from 2015 to 2023, generating 1,872 city-year observations (with 44 treated cities).

Model Specification: The study specifies a fixed-effects panel model: $Y_{it}^m = \alpha + \beta Base_{it} + \gamma X_{it} + \mu_i + \lambda_t + \epsilon_{it}$ . Here, $Base_{it}$ is the core explanatory variable indicating whether city $i$ in year $t$ has been designated a demonstration base. The model controls for city fixed effects ( $\mu_i$ ) to account for time-invariant heterogeneity and year fixed effects ( $\lambda_t$ ) to capture common shocks.
Outcome Variables: The analysis examines three distinct dimensions:
1. Resident Sports Consumption: Measured by per capita household expenditure on education, culture, and entertainment.
2. Economic Value of the Sports Industry: Measured by the value added in the culture, sports, and entertainment sectors.
3. Employment Absorption Capacity: Measured by employment numbers in the sports and entertainment sector.
Robustness Checks: The study validates the parallel trends assumption using event-study tests (Callaway and Sant'Anna, 2021 approach) and conducts spatial placebo tests involving 500 random samples of untreated cities to rule out unobservable factors.

Key Results
The empirical findings reveal a heterogeneous impact of the demonstration base policy across the three evaluated dimensions:

Economic Value: The establishment of demonstration bases has a significant positive effect on the economic value of the sports industry. This result remains robust across models with and without control variables, indicating that the policy successfully drives regional sports economic development.
Resident Consumption: Contrary to Hypothesis 1, the study finds no statistically significant effect on resident sports consumption levels. Initial positive correlations were attributed to pre-existing differences between cities rather than the policy itself.
Employment Absorption: Similarly, the policy shows no significant positive effect on employment absorption in the sports industry. The initial significance observed in models without fixed effects vanished after controlling for city-specific heterogeneity, suggesting that the policy does not currently generate a net employment expansion effect.

Key Contributions
The paper makes three primary contributions to the literature:

Level of Analysis: It shifts the analytical focus from enterprise-level or provincial-level aggregates to the city level, refining outcome variables within the sports industry to reduce bias from macro-level proxies.
Unified Framework: It integrates economic value, employment, and consumption into a single analytical framework, offering a more comprehensive assessment of policy impacts than previous single-dimension studies.
Methodological Rigor: By exploiting the staggered timing of base recognition and applying a multi-period DID framework, the study more effectively distinguishes pre-existing advantages from causal policy effects compared to static or average treatment approaches.

Significance and Policy Implications
The study concludes that while National Sports Industry Demonstration Bases function effectively as "growth poles" that concentrate capital, land, and information to enhance the economic value of the sports industry, they have not yet translated these gains into broader employment expansion or increased resident consumption. The authors attribute the lack of employment growth to the industry's structural shift toward service-oriented, high-value-added activities that rely less on labor input, as well as the influence of digital technologies reducing labor dependence. The lack of consumption growth is linked to external constraints, including pandemic-related restrictions and weak domestic demand.

Based on these findings, the paper proposes three specific policy directions:

Upgrade Evaluation Mechanisms: Move beyond simple investment scales to include indicators for employment absorption and consumption stimulation in base designation and routine assessments.
Strengthen Employment Transformation: Focus on business formats with high labor absorption (e.g., manufacturing, event operations, training) and integrate industry development with vocational training and higher education.
Optimize Product Supply: Align sports products and services with resident preferences and consumption capacities, utilizing data-driven approaches to innovate consumption scenarios and coordinate with related sectors like tourism and culture.

The authors maintain a modest stance, acknowledging that the findings are specific to China's policy-driven context and may not be fully generalizable to other institutional settings, though the issues revealed are relevant to regions at similar stages of development.

Technical Summary: Impact of National Sports Industry Demonstration Bases on Regional Sports Development

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