Abstract：This paper integrates UIC and internal R&D into knowledge production function framework to study the innovation effect of UIC by using the knowledge stock of UIC.Based on the provincial panel data from 2005 to 2015,we conduct empirical study with dynamic panel model.Results show that,UIC improves innovation output while crowding out the internal R&D.Robust study also proves the same conclusion.Heterogeneity analysis results show that:innovation effect of UIC grows with R&D intensity which indicating the important effect of absorption capability;the crowding out effect on internal R&D goes deeper with UIC intensity deepen.
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