Can IP tribunals increase firm patent applications?—Empirical evidence from China

Yufei Zhang, Li Wang and Tengjiao He

China Economic Review, 2024, vol. 87, issue C

Abstract: This paper aims to examine whether property rights protection can enhance firm innovation. To address the endogeneity problem and establish a causal relationship, we adopt the establishment of Intellectual Property Tribunals (IP Tribunals) in China as a natural experiment and employ the Difference-in-Differences (DiD) approach for estimation. By measuring firm innovation via patents and invention patent applications, we find that establishing IP Tribunals can significantly boost firm innovation. Furthermore, we investigate the heterogeneity of our baseline results and discover that privately-owned firms, smaller-sized firms, non-high-tech firms, and firms located in less marketized areas experience a larger improvement in innovation. This finding suggests that this institutional improvement provides greater protection to disadvantaged firms. Breaking regional protectionism and relaxing firm financing constraints are two possible mechanisms through which IP Tribunals can enhance firm innovation. Our results provide new evidence on how institutional change affects economic growth in China.

Keywords: Property rights protection; Intellectual property tribunal; Firm innovation; Institutional change; China economy (search for similar items in EconPapers)
JEL-codes: K11 O34 P14 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:87:y:2024:i:c:s1043951x24001299

DOI: 10.1016/j.chieco.2024.102240

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