Intellectual property rights protection and firm innovation: Evidence from half million firms in China

Bochuan Dai, George Chao Ma and Tao Shen

Journal of Comparative Economics, 2025, vol. 53, issue 4, 977-1000

Abstract: We examine the impact of intellectual property rights (IPR) protection on local private firm innovation. Using the implementation of local patent dispute jurisdiction in China as exogenous shocks, we show that private firm patenting activities in cities with jurisdiction are significantly higher than those in cities without local jurisdiction. Consistent with our hypotheses, the effect is more prominent for firms in cities that have different cultural disparity from their provincial capital cities and in cities with a better judicial environment. We provide additional evidence that access to capital, innovation efficiency, city development, and industry competition can influence the effect of local IPR protection in the expected way. Our paper highlights the importance of proximity and accessibility to local patent dispute jurisdiction for promoting private firm innovation in China.

Keywords: Corporate innovation; Intellectual property rights; Private firms (search for similar items in EconPapers)
JEL-codes: G38 K11 O34 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:53:y:2025:i:4:p:977-1000

DOI: 10.1016/j.jce.2025.07.003

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