Abstract:Building beyond the logarithmic knowledge production function, theoretically analyzing complementary and alternative effect of the internal and external innovation and the key factors influencing; Collecting panel data related to the internal and external innovation input and output during 2000-2014 in high and new technology enterprises, using the econometric model, the empirical test has been carried on the related theory. found: (1) In the absence of internal adjustment of absorptive capacity ,the internal and external innovation input has alternative effect to the output of R D and commercialization stage .(2) Under the condition of internal absorption ability regulation, the internal and external innovation input has complementary effect to the output of R D and commercialization stage (3) absorptive capacity has a significant adjustment to the complementary effect of the internal and external innovation input. Based on this, the paper proposes policy recommendations to improve innovation performance of high and new technology enterprises in China effectively