The more interactions the better? The moderating effect of the interaction between local producers and users of knowledge on the relationship between R&D investment and regional innovation systems

• Firm's R&D investment is positively related to regional innovation systems (RIS).
• R&D investment from Universities and research institutes contribute directly to RIS.
• Interaction between local producers and users of knowledge has moderating effect on above-mentioned relationships.
• Interaction between local producers and users of knowledge has an inverted U-shaped relationship with RIS.

Under the fierce pressures of the rapidly changing environments, regional innovation systems are important in regional economy and national competitiveness. This study examines how R&D Investment from firms, universities and research institutes (Core component of Triple Helix Innovation) helps build regional innovation systems and its contingencies in China's emerging economy. A panel dataset from thirty provincial level regions in China from 2002 to 2011 indicates R&D investment from firms, universities and research institutes is an important driver of regional innovation systems. The effectiveness of R&D Investment is contingent on the interaction between local producers and users of knowledge. When the interaction between local producers and users of knowledge becomes increasingly active, R&D investment from firms, universities and research institutes has a stronger effect on the building of regional innovation system. Moreover, the interaction between local producers and users of knowledge has an inverted U-shaped relationship with the building of regional innovation systems.