Regional innovation efficiency in China: The role of local government

Based on the panel data of China's 30 regions during 1998-2008, this study conducted an empirical analysis on the regional innovation efficiency of China, and mainly analyzed the influences of local government on regional innovation efficiency. Our results show that regional innovation efficiency in China is low. The local government R&D funding has a significantly negative impact on regional innovation efficiency. This indicates that the role of local government has not been effectively carried out in China's regional innovation system. Besides local government, other factors, such as universities, research institutes, financial institutions in regional innovation system, also have significant negative impact on innovation efficiency. This indicates that internet construction of the regional innovation system is far from perfect. Improvement of the regional innovation environment and construction of a system network bear significant importance in improving innovation efficiency.