Abstract: Accelerating the construction of a unified national market, breaking down local protectionism and market segmentation, and stimulating the innovation motivation and vitality of research and development entities are powerful measures to build a new development pattern and promote high-quality economic development. The empirical analysis based on the data from Chinese prefecture level cities and listed companies from 2003 to 2019 shows that market segmentation has significantly inhibited corporate technological innovation, and that market segmentation has a restraining effect on technological innovation in high-tech industries, digital economy industries, and state-owned enterprises, while its impact on non high-tech industries, non digital economy industries, and non-state-owned enterprises is not significant. This indicates that market segmentation has a more serious hindering effect on enterprises that rely on technological innovation to maintain market competitiveness. The mechanism test reveals that market segmentation has reduced the degree of market competition and hinders the formation and intensity improvement of regional industrial clusters. Further research shows that market segmentation is not conducive to cultivating regional localization innovation capabilities and hinders the development of technological innovation. Therefore, it is crucial to clarify the inherent connection between market segmentation and enterprise technological innovation. We should take market-oriented reforms as the guide, enhance the enforcement of competition policies, accelerate the construction of a unified national market, and promote the implementation of innovation driven development strategies.

Key words: market segmentation, enterprise technological innovation, national unified market, government intervention, market competition