Abstract: Establishing an honest government is a primary measure to optimize the business environment and build a friendly and clean relationship between government and business, which has a profound impact on enterprises’ research and development motivation and innovation behavior. Based on the measurement of the regional government integrity level with Baidu Search Index, this study conducts empirical tests on the impact and transmission mechanism of the regional government integrity on enterprise innovation quality by taking listed industrial enterprises in China’s A-share market as samples. The findings reveal the following facts: firstly, the level of regional government integrity has a significant promotion effect on the enterprise innovation quality; secondly, there is significant business heterogeneity in the effect of regional government integrity on the innovation quality of enterprises. To improve local government integrity will significantly promote the innovation quality of small-scale enterprises, non-state-owned enterprises, enterprises in the high-tech intensive industries, low asset specific enterprises and enterprises in the eastern region; thirdly, government integrity affects the innovation quality of enterprises mainly by encouraging enterprises to engage in more complex invention and innovation, independent innovation and reducing transaction costs; fourthly, the level of Internet development will amplify the role of government integrity on the quality of enterprise innovation. The above conclusions suggest that in the Internet era, local governments should pay more attention to the construction of government integrity, improve the level of governance, and consolidate the foundation for the honest society, so as to promote the independent innovation momentum of local enterprises, improve the quality of innovation, and help to achieve the high-quality development of the economy.

Key words: government integrity, innovation quality, internet development, business environment