Abstract: As the bridgehead of China's new round of institutional innovation and the policy change of the development zone under the characteristic mode of "learning by doing" by the government, the construction of the pilot free trade zone has become an important starting point to achieve the goal of high-quality economic development in China. This paper takes the establishment of the pilot Free trade zone as a "quasi-natural experiment" and uses the difference method to investigate the influence of the construction of the pilot free trade zone on the innovation activities of enterprises. The research finds that: Establishment of free trade area for the promotion of enterprise innovation can have a significant and steady, but there is a certain gap between specific policy effect and experience cognition, free trade area construction of large and medium-sized cities and small and medium-sized enterprises, state-owned enterprises, enterprise innovation promoting effect compared with smaller cities are more significant, large-scale enterprises and private owned enterprise, Inland and the third batch of pilot Free trade zones have a stronger incentive effect on enterprise innovation than coastal and the first and second batch of pilot Free trade zones. From the perspective of mechanism, although the construction of pilot free trade zones helps to promote enterprise agglomeration, improve the level of tax incentives, and reduce institutional transaction costs to a certain extent, it mainly promotes enterprise innovation through tax incentives in "policy rent". In addition, the pilot Free trade zone mainly affects the innovation of enterprises in the region, and there is no significant innovation spillover effect on enterprises in neighboring cities. The conclusions of this paper not only enrich the literature on the promotion of enterprise innovation by development zone policies, but also provide important theoretical basis and policy enlightenment for how to construct pilot free trade zones according to local conditions and better play their innovation incentive effect

Key words: pilot free trade zone, enterprise innovation, quasi-natural experiment