Abstract: Based on new economic geography and endogenous growth theory, this paper constructs a local spillover model constrained by the degree of trade freedom, and explores the mechanism of innovation spatial diffusion and agglomeration affecting high-quality economic development. It is found that symmetric equilibrium is the only interior equilibrium of the model; When the corner is balanced, there is a unique support range of trade freedom. At this time, if the transportation cost becomes smaller, the skilled labor force, R&D sector, manufacturing sector and innovation activities will become more concentrated. At the same time, the spatial diffusion of innovation will become larger, and the disadvantage of peripheral regions in R&D and innovation will be weakened; From the perspective of growth and welfare evaluation, under the condition that the stock of skilled labor remains unchanged, the spatial diffusion of innovation has no impact on the economic growth of the whole economy. However, when the regional economic growth comes from the agglomeration of mobile skilled labor, the skilled labor and ordinary labor in the central region always prefer the agglomeration state. If and only if the spatial diffusion effect of innovation is large enough or the agglomeration rent is low, the ordinary labor force in the peripheral area prefers the agglomeration state. Therefore, reducing transportation costs and improving trade freedom will help to increase the diffusion effect of innovation space, reduce agglomeration rent and improve the welfare level of labor force in the whole region, so as to promote high-quality economic development.
