Abstract: Since the implementation of the innovation-driven development strategy and the“Internet Plus”strategy, the Chinese government has actively explored how to give effective play to R&D funding and the Internet so as to improve innovation efficiency. By making use of the provincial panel data from 2006 to 2018, this paper examines the impact of government R&D funding and Internet development on the innovation efficiency in China. The results show that both government R&D funding and Internet development have significant promoting effects on the innovation efficiency, and the government R&D funding has a stronger effect on enterprises than on research institutions. The Internet development has a significant positive moderating effect and threshold effect on the above funding effects. When the Internet development crosses a certain threshold, the effects of government R&D funding all turn into a significant promotion effect, and the threshold value of government R&D funding to enterprises is lower and the effect is stronger than that to research institutions. The above conclusions are consistent in different regions, especially in coastal areas. Therefore, it is suggested to increase government R&D funding, especially for enterprises, and pay attention to providing long-term and stable R&D funding for research institutions; actively upgrade the level of Internet development and narrow the gap in Internet development among different regions; accelerate the integration and penetration of the Internet with innovation factors, effectively create an interconnected environment for government, industry, universities, and research institutes, and give full play to the effect of the Internet platforms.

Key words: government R&D funding, internet development, innovation efficiency, panel threshold model