Abstract: Under the background of innovation-driven development strategy, the topic about influencing factors of industrial enterprises’ innovation efficiency in China is highly concerned, but to a great extent the influence of industrial agglomeration on industrial enterprises’ innovation efficiency is neglected. Industrial agglomeration can promote industrial enterprises’ innovation efficiency through multiple mechanisms such as competition effect, cooperation effect, knowledge spillover effect, learning effect, and scale economies effect, etc, whereas excessive agglomeration can also negatively influence innovation efficiency. The empirical study of this paper finds that the relationship between industrial agglomeration level and innovation efficiency of industrial enterprises takes on a reverse-U shape, which provides important inspiration on how to improve industrial innovation efficiency through bettering the spatial distribution of industries.

Key words: industrial agglomeration, innovation efficiency, super-efficiency DEA, reverse-U relationship