The academic community has already reached fruitful results of factors that influencing enterprise innovation, from both macroeconomic and microeconomic perspective. From the macroeconomic perspective, scholars have paid much more attention to the effect that the government actions has on the innovation of enterprises, such as economic policy, industrial policy monetary policy and tax policy, while there are few literatures which examine the important function of the party in the innovation of enterprises. The main reason for such deficiencies in theoretical literature is that scholars cannot find a convincing alternative variable of non-economic system, which leads to the inability to establish a rigorous logical framework and empirical model to analyze the transmission path of state governance system affecting enterprise innovation. As a strategic system arrangement of intra-party supervision, inspection supervision has a special and important position in the supervision system of the Communist Party of China. As a quasi-natural experiment carried out nationwide, inspection supervision provides a rare research opportunity for the academic community to study the influence of the state governance system on the behavior of micro enterprises. Existing literature has proved that inspection supervision can have an impact on corporate performance, internal control concerns and negative information release, which is of positive significance for the academic and practical community to study the microeconomic consequences of inspection supervision. However, no literature has been able to study the impact of inspection supervision on the decision-making behavior of state-owned enterprises from the perspective of innovation efficiency. This provides a rare opportunity for the research of this paper. Therefore, it is of great practical significance and theoretical value to study the influence mechanism of non-economic system factors in the state governance system on the innovation efficiency of state-owned enterprises with inspection supervision as the entry point. 

Based in the above, this paper takes the annual observation samples of 18107 listed companies in Shanghai and Shenzhen A-share market from 2010 to 2017 as the object, and studies the influence mechanism of the Party on the innovation efficiency of enterprises based on the quasi natural experiment of inspection supervision, and analyses the impact that inspection supervision of the Communist Party of China has on the improvement of performance and value growth of innovation. The main conclusions of this paper are as follows: first, inspection supervision of the Communist Party of China could actively promote the innovation activities of state-owned enterprises, which would improve the innovation input, output and efficiency, and this conclusion is still robust after controlling endogenous problems. Second, inspection supervision will improve the innovation efficiency by reducing the occurrence of short-sighted behavior of management and the occurrence of rent-seeking behavior. Third, inspection supervision of the Communist Party of China can significantly improve the marginal contribution of innovation to the performance and value of state-owned enterprise.