Abstract: This paper examines the periodically asymmetric impact of financial development on R&D intensity by using panel data of 30 provinces and cities in China during the period of 1998-2014. The empirical results show that: in the period of economic expansion, improving financial efficiency and financial structure can effectively promote R&D intensity, among them, the former is more conducive to boost R&D intensity; but in the period of recession, due to the crowding out effect of fixed-assets investment on R&D expenditure, improving financial efficiency and financial structure has a negative impact on R&D intensity, and the latter has greater negative influence. After investigation into each region, we found that such crowding out effect is stronger in eastern region. In addition, increasing financial scale in the period of economic expansion will reduce China's R&D intensity, while in the period of economic recession, its impact is limited. This phenomenon is particularly prominent in the eastern and western regions. Therefore, in order to effectively employ the financial method to promote innovation, China should strive to avoid the crowding out effect of fixed-assets investment on R&D expenditure and form diverse mix of technological and financial policy for each region concerning certain stage of business cycle.