Abstract:     As China′s economy enters a new normal, there is an urgent need to shift from an investment-driven growth model to an innovation-driven development model. Innovation and entrepreneurship are considered as the driving forces to stimulate market dynamics. However, existing studies have only considered the impact of a single government policy on innovation or entrepreneurship on high-quality economic development, lacking a systematic examination of innovation and entrepreneurship in a unified analytical framework. The "Implementation Opinions on Building Demonstration Bases for Mass Entrepreneurship and Innovation" issued by the General Office of the State Council in 2016 (referred to as the "entrepreneurship and innovation demonstration base construction " pilot policy), provided a unique perspective and advantage to address the above issues. Under the framework of new structural economics, this paper analyzed the theoretical mechanism of how "effective market" and "active government" can be coordinated and unified to jointly contribute to high-quality economic development in the pilot area. Then, based on the panel data of 285 prefecture-level cities in China from 2012 to 2019, the hypotheses proposed in the theoretical part are tested empirically using the staggered difference-in-difference method. Finally, corresponding policy enlightenments are proposed in response to the results of the empirical analysis.This paper has made several findings: (1) the construction of entrepreneurship and innovation demonstration bases can significantly promote high-quality economic development in pilot regions compared to non-pilot regions. After a series of robustness tests such as replacing the explanatory variables, choosing different matching methods to reduce the sample selection bias, and lagging the control variables to avoid reverse causality, the regression analysis results of this paper still hold robustly. (2) The mechanism test found that the pilot policy mainly promotes high-quality economic development by enhancing the government′s strategic leadership in science and technological innovation while optimizing the institutional business environment, and the mediating effect of the former is significantly higher than that of the latter. This finding will help to reconcile the differences between government intervention theory and free market theory, and verify from the perspective of new structural economics that "active government" and "efficient market" can work together in practice, especially to give full play to the role of government in promoting high-quality economic development. (3) The heterogeneity analysis showed that the pilot policy can promote high-quality development in provincial capitals, sub-provincial cities and cities with strong intellectual property rights (IPR) protection more than in ordinary prefecture-level cities and areas with weak IPR protection, but there may be an optimal interval about the impact of IPR protection on high-quality economic development. (4) There is a significant spatial spillover effect in the construction of the demonstration base of entrepreneurship and innovation, which will not only promote the high-quality development of the local economy, but also bring certain benefits to the high-quality development of neighboring cities, without creating a "siphon effect" that hinders the coordinated development of the regional economy. This will provide a feasible path for narrowing the regional economic development gap and achieving the goal of common prosperity based on the perspective of entrepreneurship and innovation. This paper will also provide the practice enlightenment for the path of achieving high-quality development in China. Firstly, we should continue to promote the construction of the entrepreneurship and innovation demonstration bases, connect the demonstration bases of enterprises, universities and research institutes, and form a collaborative innovation model combining industry, academia and research. Second, we should give full play to the dual-wheel-drive role of "competent government" and "effective market" in the pilot zone, so as to better serve the high-quality economic development. This also reveals that our future policy evaluation should be directed at "how the government should better implement innovation policies", rather than continuing to argue about "whether government innovation policies are effective". Third, we should establish a more complete intellectual property protection system, respect intellectual property rights, promote entrepreneurship, and ensure that policy objectives are matched with policy tools. In addition, provincial capitals and sub-provincial cities should play an exemplary role in driving neighboring prefecture-level cities, and policy preferences, talent support, and technical support can be appropriately tilted to ordinary prefecture-level cities. Fourth, we should also optimize the spatial layout of pilot cities, according to the development progress of pilot cities, geographic location, industrial advantages and other conditions, to make strategic adjustments and layout, the formation of complementary industries in various regions, resource interaction, and give full play to the superposition effect of policies between regions and entrepreneurship and employment promotion effect.

Key words: demonstration base of entrepreneurship and innovation, high-quality development, effective market, promising government, spatial spillover effect