Abstract:The effect of talents classification and self selection resulted in the economic space relation, so the enterprise heterogeneity has a great impact on the difference of the regional production efficiency. By using the panel estimation on the data from 28 provinces in China from 2006—2007, we find that (1) the higher the enterprise heterogeneity the higher the regional production efficiency; (2) the effect of talents classification and self selection is the medium variable that enterprise heterogeneity influences the regional production efficiency; (3) the stronger the effect of talents classification and self selection, the higher the regional production efficiency; (4) the density of regional population, the completion of regional infrastructure, foreign direct investment (FDI) and human resource capital are not in a positive relation to the regional production efficiency as maintained by the previous study. Therefore, in making the regional developmental policy, we are in a position to conduct an appropriate control of such variables as the density of regional population, the completion of regional infrastructure, foreign direct investment (FDI) and human resource capital.