Abstract:Innovation is the core engine of urban development and leads to high quality economic growth. Supported by the panel data of 271 cities in China from 2003 to 2018 as research samples, this paper intends to analyze the impact of infrastructure construction and FDI on the non linear heterogeneity of urban innovation output with the level of economic development as the threshold variable. The empirical results show that the infrastructure investment and FDI have different effects on urban innovation output. There are two threshold effects in the level of economic development. When the level of economic development exceeds the first threshold, infrastructure investment and FDI will show the incentive effect on local innovation. The impact of innovation output in the geographical vicinity has significant spatial dependence. For cities with large gaps in economic development, infrastructure construction significantly enhances innovation spillover effects.