Abstract:Based on the establishment of the panel data model, the paper selects knowledge creation, knowledge acquisition, technological innovation, innovation environment and innovation performance in China’s regional innovation ability as explanatory variables, chooses foreign R D expenditure in China as interpreted variable, and makes regression analysis of 30 provinces panel data from 2004 to 2013. The results show that the enterprise innovation ability has the most significant effect on foreign R D investment in China (regression coefficient is 2.027), that knowledge acquisition, innovation environment and innovation performance follow (regression coefficients are 1.416, 1.292, 1.147 ,respectively,), and that the effect of knowledge creation is low (t-test does not pass).