Research on regional difference mechanism of circulation innovation based on panel regression model

Abstract The panel regression model is remarkably persuasive in exploring the causal relationship. Therefore, combined with China’s macroeconomic data from 2004 to 2021, this paper uses a panel regression model to reveal the influence mechanism of regional differences affecting innovation flow. Using the improved Theil index to construct panel data of regional differences, this paper explores the reasons for the unbalanced development of technological innovation circulation in China. The empirical results of the fixed effects model show that after controlling for the differences in economic opening environment and firm profit space, the differences in government support and circulation environment significantly affect the regional differences in technological innovation circulation level. This result helps to verify the existence of a “double wheel drive” mechanism in the construction of China’s circulation innovation system, that is, the dual leading role of “effective government” and “efficient market” with Chinese characteristics.