The diffusion of technological knowledge across regions is fundamental for enhancing innovation capacity and achieving balanced regional development. While prior research has highlighted the role of technological proximity in facilitating knowledge spillovers, it often neglects the dual nature of inter-city linkages that encompass both competition and complementarity. This paper extends the discussion by introducing the concept of technological complementarity, defined as cities sharing a broad cognitive base but specializing in different sub-fields, thereby creating heterogeneous yet synergistic technological structures. Using patent application and citation data from 284 Chinese cities between 2003 and 2019, we construct a novel index of inter-city technological complementarities based on IPC categories and link it with patent citation flows. The resulting panel of 681,748 city-pair observations enables a systematic empirical assessment of how complementarities shape technological knowledge diffusion.

The empirical results show that technological complementarities significantly promote inter-city technological knowledge diffusion. Cities with higher complementarities are more likely to cite each other’s patents, indicating stronger knowledge flows. A one-unit increase in complementarity is associated with a substantial rise in both the intensity and probability of patent citation. Unlike excessive similarity, which often induces homogeneous competition and technological lock-in, complementarities provide non-redundant knowledge resources, enhancing opportunities for recombination and innovation. Thus, complementarities are revealed as a critical driver of regional knowledge dynamics, contributing to the resilience and efficiency of innovation networks.

Mechanism analyses further reveal that complementarities foster knowledge diffusion through three pathways: collaborative innovation, technology transfer, and talent mobility. Complementary cities are more likely to engage in joint R&D and co-patenting, lowering communication barriers and facilitating tacit knowledge exchange. They also promote technology transfer, which transforms potential externalities into tradable innovation elements and strengthens cross-regional application of knowledge. In addition, complementarities stimulate the mobility of skilled talent, who act as carriers of tacit knowledge and bridge otherwise disconnected networks. These mechanisms collectively establish a robust chain through which complementarities translate into knowledge diffusion.

Finally, contextual and heterogeneity analyses show that the impact of complementarities is contingent on environmental conditions. Cultural distance increases communication costs and reduces complementarities’ effectiveness, whereas institutional proximity enhances cooperation predictability and amplifies diffusion. Transportation connectivity, particularly high-speed rail, mitigates spatial decay and enables complementarities to function over long distances. Moreover, eastern and high-tier cities benefit more strongly from complementarities due to superior absorptive capacity and institutional support, while effects are weaker in central, western, and lower-tier cities.

Overall, this study contributes to innovation geography and regional innovation empirically validating the role of technological complementarities in shaping inter-city knowledge diffusion, extending the theoretical framework beyond technological proximity, and providing policy implications for fostering collaborative innovation platforms, reducing institutional frictions, and facilitating talent and technology flows across regions.