Abstract:Based on the resource-based theory, this paper holds that fiscal autonomy, as a valuable, scarce, non-imitative and organizational financial resource, is the source of good regional innovation performance for local governments. Using panel data of China's provinces (autonomous regions, municipalities directly under the central government) from 2007 to 2016, this paper empirically tests the impact of fiscal decentralization on regional innovation performance. The results show that: (1) fiscal decentralization has a significant positive impact on regional innovation performance, and the results are still stable after considering the heterogeneity of fiscal decentralization or innovation performance, innovation intensity, endogenous and other issues. (2) when local governments use expenditure autonomy to achieve good regional innovation performance, there is a problem of "soft constraint", that is, income decentralization has a constraint effect on the relationship between expenditure decentralization and regional innovation performance, but it is not significant. The possible reason is the "public pool" effect and innovation lock-in effect of transfer payment of the central government.