Abstract:    For a long time, China′s regional economy has been guided by GDP growth, and the phenomenon of market segmentation and local protection is very serious. The traditional thinking of regional economy and local government′s standard interests to some extent inhibit the flow efficiency and allocation efficiency of various factors in different regions, and regional integration is the main way to break down such administrative barriers and institutional barriers. As a major regional policy, regional integration promotes the inter-regional flow of factors, realizes the efficient allocation of resources in a larger space. Regional integration realizes resource sharing and complementarity through intra-regional industrial division of labor and cooperation, improves the optimization effect of resource allocation, and thus can drive the overall regional transformation to high-quality development. In addition, regional integration can also alleviate the problem of insufficient supply of immobile elements, thus providing broad space for regional development. The fundamental purpose of regional integration is to make the best use of regional differences to build economic complementarity, activate the flow efficiency and allocation efficiency of various production factors in the region, and maximize the marginal effect of production factors. With the further development of China′s economic development strategy towards the direction of regional integration, higher quality regional coordinated development should become the main development mode of urban agglomerations in the future.The Yangtze River Delta region is one of the regions with the most active economic development, the highest degree of openness and the strongest innovation capacity in China. In April 2018, General Secretary Xi Jinping proposed the Yangtze River Delta to achieve higher quality of integrated development. In November of the same year, General Secretary Xi Jinping proposed to support the integrated development of the Yangtze River Delta as a national strategy. Thus, it is of great significance to promote the integrated development of the Yangtze River Delta, enhance the innovation and competitiveness of the Yangtze River Delta, and improve the degree of economic agglomeration, regional connectivity and policy coordination efficiency, so as to lead the high-quality development of the whole country and build a modern economic system. However, at present, the development of China′s regional economy is facing such problems as the gradual disappearance of the demographic dividend, the continuous decline of the environmental carrying capacity, the economic slowdown and the structural transformation and upgrading. A large number of studies show that the key to solving the bottleneck of China′s economic development lies in innovation, which promotes the original economic development model to be driven by innovation instead of extensive factors. The strategy of innovation-driven development was put forward at the 18th National Congress of the CPC in 2012, and the government work report of the State Council in 2019 pointed out that the strategy of innovation-driven development should be further implemented to promote the capacity and efficiency of innovation. All these prove the urgency and necessity of innovation-driven development at the present stage. In fact, the Yangtze River Delta has always been committed to promoting regional innovation capacity through integration. For example, the Yangtze River Delta large instrument network jointly established by three provinces and one city for the purpose of sharing large scientific instruments, the Shanghai science and technology innovation voucher launched to enhance the radiation effect of Shanghai′s innovation resources, and the G60 science and innovation corridor and the joint construction of industrial parks and so on. Then, has the Yangtze River Delta integration development strategy promoted the ability of urban innovation? What is the mechanism? Are there individual differences? In this regard, the study of this paper will answer the series of questions, for the realization of higher quality regional integration of the Yangtze River Delta development, to promote the regional development model to innovation-driven transformation to provide reference.Firstly, in the theoretical analysis, this paper regards the transaction cost between regions as the degree of regional integration, and the marginal cost of enterprises as the level of regional innovation. By deducing the footloose capital model, this paper finds that the improvement of regional integration is conducive to the improvement of innovation level. And then, based on urban statistics of cities in the Yangtze River Delta from 2005 to 2017, this paper examines the driving role of regional integration in urban innovation capabilities by spatial econometric model. The results show that regional integration plays a significant role in driving the innovation ability of the Yangtze River Delta. This paper further analyzes the innovation incentive mechanism of regional integration from the two dimensions of industrial agglomeration and industrial transfer. The results show that regional integration has promoted regional industrial agglomeration to some extent, but it has not formed a mechanism to improve urban innovation capacity. On the contrary, the intra-regional industrial transfer mechanism promoted by regional integration effectively improves the urban innovation capacity. In addition, this paper still examines the regional heterogeneity of the effect of integrated innovation from three dimensions: city status, development level and decentralization degree. The heterogeneity estimation results show that the regional integration of the Yangtze River Delta has a more significant driving effect on the innovation ability of non-core cities, cities with low economic development level and cities with low fiscal decentralization.The above conclusions have important policy significance and value for promoting the innovation-driven high-quality development of the current regional economy. Firstly, we should further promote the regional integration of the Yangtze River Delta, activate the liquidity and rooting of factors in the Yangtze River Delta, and promote the high-quality development of regional economy. Secondly, it is necessary to promote the reform of market-based allocation of factors in the Yangtze River Delta, improve the construction of factor market system, and provide support for all kinds of factors to freely and efficiently flow to regions and industries with comparative advantages. Finally, in the process of integration, the convergence mechanism of integrated innovation ability should be relied on to bridge the gap of regional innovation ability, so as to realize balanced and coordinated development of regions.

Key words: regional integration, innovation capability, Yangtze River Delta urban agglomeration