Abstract:This paper uses dynamic spatial econometric model to empirically analyze panel data of 30 provinces (cities, autonomous regions) in China from 2003 to 2016, aiming to explore the spatial correlation between market segmentation and provincial innovation efficiency, and reveal The transmission mechanism of innovation factor flow plays a role in both. The study found that the degree of market segmentation has a downward trend, but it still has a very significant inhibitory effect on the efficiency of innovation. This inhibition is manifested by the diminishing of Chinese and Western. Further exploration reveals that the mediating role of the flow of innovation elements is very significant. The mediation effect of market segmentation by inhibiting the flow of R&D personnel and inhibiting innovation efficiency is greater than that of R&D capital. In the three regions of East, Central and West, the mediating role of innovation factor flows is different. The downward trend of China-East-West.