Abstract: The process and outcome of technology innovation are incorporated into a unified analytical framework and an empirical investigation involving the impact of market process and legal environment on technology innovation is conducted. The results show that: (1) Enterprise R&D intensity has the positive correlation with the regional market process, and also the transformation degree of R&D patent and its efficiency has a strong dependency on the legal environment. (2) The responsiveness of central state-owned enterprise's R&D investment to the regional market process is the highest; and due to lack of administrative power from the government for protecting the patent outcome of technology innovation, the impact of legal environment on patent transformation for the private enterprise's R &D is quite significant. (3) The promoting effect of the market process on the investment in R&D of the local state-owned enterprise is easily undermined by the intervention of local governments, and also the technological innovations can easily obtain the protection from the administrative power of the local governments, thus the dependence on the legal environment is reduced. These conclusions can provide the theoretical and empirical basis for further improving the market and legal environment of technology innovation.

Key words: market process, legal environment, R&D intensity, patent transformation