Abstract:Based on coupling coordination degree, entropy weighted method, relative price method and multiple regression analysis,an index system of regional innovation ability was constructed from three dimensions of innovation input, output and collaboration, and empirically examines how market segmentation affects regional innovation capability. The study found that market segmentation significantly inhibited the improvement of regional innovation capabilities, which had the most negative impact on innovation input, followed by innovation output, and minimum innovation synergy; the inhibitory effect of market segmentation was mainly achieved by locking the scale of market demand, restraining the accumulation of human capital and reducing the efficiency of resource allocation. In addition, as the regional innovation capacity moves from a low level of conditional distribution to a high level,its inhibitory effect showed an inverted u-shaped trend of first strengthening and then weakening.Further, the regional characteristics show a significant heterogeneity effect on the relationship between the two.In the regions with developed technology market, high level of financial development and marketization, its negative impact can be alleviated.