Abstract: Institution research is essential for improving national governance and promoting scientific and technological innovation. As a unique and crucial institutional factor in the context of China, market segmentation’ impact on high-tech industries’ development remains unexplored. Based on the institutional logic theory, this paper considers market segmentation and high-tech industries as the expression of local and central institutional logics. Hence, the difference between local and central institutional logics may serve as the theoretical foundation of the relationship between market segmentation and high-tech industries. Using the provincial panel data from 2005 to 2018, this paper finds that market segmentation has a negative effect on high-tech industries’ innovation and entrepreneurship, and such a relationship is more significant in the middle and west region. However, FDI, which is separate from the two institutional logics, can positively moderate the impact of market segmentation on high-tech industries, playing a lubrication role in the vertical conflict of institutional logics. According to these conclusions, this paper proposes several policy implications in promoting market integration and the development of high-tech industries.