Abstract:There is no agreement about the relationship between public S T subsidies and technological innovation, but each country’s government is inclined to solve the “market failures” of industrial enterprises’ technological innovation. This paper analyzes whether the public S T subsidies can affect Chinese industrial enterprises’ technological innovative capacity from the perspective of efficiency. The results reveal that there is “U”-form relationship between public S T subsidies and Chinese industrial enterprises’ technological innovative efficiency. It can improve industrial enterprises’ technological innovative efficiency when public S T subsidies generate scale effect; while it restrains industrial enterprises’ technological innovation efficiency because of unreasonable structure of public S T subsidies. It’s still a long way for state-owned and non-state-owned industrial enterprises to achieve the goal of innovation-driven development; the variables of location, infrastructure, workers’ capacity and opening degree and so on have different effects on state-owned and non-state-owned industrial enterprises’ technological innovative efficiency. Finally, this paper will contribute to the policy proposal for China"s industrial enterprises’ improvement of the technology innovative efficiency from the view of public S T subsidies, the “hardware” environment, “intelligence” support, “atmosphere” edification.