The paper analyses the impact of institutional factor on regional economic growthempirically studying the data from 1995 to 2007 of Jiangsu and Zhejiang provinces，and make comparative study between the two provinces. Firstly we discuss the reasonable casual relationship among variables using time-series analysis method and GRANGER test；Secondly we apply the C-Dproduction function and set up the econometric model to calibrate the contribution of the institutional factor toeconomic growthof Jiangsu and Zhejiang provinces. Thirdly，we come to conclusion that institutional factor，especially non-SOEs development，has pushed the economic growth significantly，and institutional factor has produced contribution to economic growth by physical capital input.