By introducing a knowledge production function which combines both foreign technology imports and domestic research and development （R＆D） expenditure into an endogenous technological progress model, this paper examines the mechanism that determines enterprises＇ R＆D intensity in developing countries, and explores how factors such as technological gap, technology absorptive capacity, innovation environment and innovation ability would impact Chinese enterprises＇decision made on R＆D intensity. Our results suggest that technological gap has no significant single impact on enterprises＇R＆D intensity, but rather influences enterprises＇decision on R＆D jointly with other factors such as degree of openness and human capital. A relative fall in efficiency of technology imitation recently has a negative effect on total R＆D intensity but helps to promote enterprises＇ independent R＆D. In addition, among factors related to R＆D innovation environment, industrial R＆D intensity has a significantly positive impact on enterprises＇ independent R＆D intensity, while regional economies of scale, proportion of large enterprises and proportion of government R＆D investment have some certain negative impacts.
