By constructing a yardstick competition model of the performance equation, this paper analyzes the internal mechanism of local governments’ competition of science and technology (S&T) expenditure in China. By using the Dynamic Spatial Panel Model, we analyze the competition empirically from five dimensions: geographical adjacency, geographical distance, administrative adjacency, administrative grade and economic distance. According to the results, the local governments’ S&T expenditure showed a significant strategic competition phenomenon, that is, there is a “competition for innovation”, and the competition is more obvious between regions with close geographical proximity and administrative relations. “Competition for innovation” will be affected by political exogenous shocks such as those from the National People’s Congress (NPC) of China; There is a “father-son competition” relationship between the superior and inferior governments. At last, the competition can promote the regional innovation significantly, which shows that “competition for innovation” is a kind of top-by-top competition. The conclusions may provide some useful suggestions for optimizing the relationship between local governments and promoting the construction of an innovative country.
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