Abstract: In order to further understand the innovation activities in innovative enterprises within a region in China, from the perspective of large sized and small-medium sized enterprises (SMEs), the innovation efficiency of these enterprises and its influence factors were analyzed employing the data from 340 innovative enterprises in Anhui Province as a sample and the stochastic frontier approach (SFA). The results show that the innovation efficiency of these enterprises is at the medium level; the innovation efficiency of the large sized enterprises is at the same level as the SMEs and some of the SMEs have strong ability of innovation. As to the influencing factors, it is found that firm size has a positive impact on the innovation efficiency of the SMEs, but no influence on that of large sized enterprises. The R&D subsidies from the government have a negative impact on the innovative enterprises innovation efficiency, while tax breaks have a positive impact on it. Different approaches are to be adopted for large sized enterprises to improve innovation efficiency from those for small-medium sized enterprises.

Key words: innovation enterprise, innovation efficiency, SMEs, SFA