Abstract: Based on a research sample of 271 Chinese cities of the prefecture level and above，an IV-GMM model is built to analyze the U-shaped relationship of manufacturing agglomeration influencing city innovation. It is found that there is a prominent U-shaped relationship，with promotion coming after inhibition， as to how manufacturing agglomeration influences city innovation； and the U-shaped relationship has a significant regional and urban scale heterogeneity. This empirical evidence reveals a new perspective for studying the non-linear relationship between manufacturing concentration and urban innovation. It is also of great theoretical and practical significance for bolstering the agglomeration of manufacturing industries and improving urban innovation levels.

Key words: city innovation；manufacturing agglomeration；U-shaped relationship；IV-GMM model