Abstract: The technology spillover from R&D capital of universities and research institutions to enterprises in the region is the key to promote transformation and upgrading. We divide R&D capital of universities and research institutions into basic research and applied research, and use extended TFP model to analyze the impact mechanism and effect of different type of universities and research institutions R&D on total factor productivity of industrial enterprises based on panel data of China’s 30 regions during the period of 1999-2010. The results show that: basic research and applied research of universities and research institutions have a positive significant impact on the TFP of industrial enterprises nationally; the impact of basic research is greater than applied research in coastal areas, and the opposite in inland areas.