Plural pathways of adaptation: Heterogeneous firm-level responses to the 2021 Chinese patent subsidy reform

Voies plurielles d'adaptation: Réponses hétérogènes des firmes à la réforme chinoise des subventions aux brevets de 2021

Emmanuel Labarbe ()
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Emmanuel Labarbe: D2iA - Dynamiques, Interactions, Interculturalité Asiatiques - ULR - La Rochelle Université - UBM - Université Bordeaux Montaigne, UBM - Université Bordeaux Montaigne

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Abstract: This paper examines the heterogeneous firm-level responses of Chinese listed firms to the 2021 reform that abolished filing-stage subsidies and restricted future aid to granted invention patents. Drawing on an original database of 1,792,943 patents from 1,256 listed firms on the Main Boards of Shanghai and Shenzhen stock exchanges, validated at 92.9% against the CPDP academic reference, this analysis documents three central stylized facts. First, the aggregate post-shock slowdown is nearly imperceptible (-0.33 percentage points) yet masks a substantial divergence between patent types: invention patents accelerate by +4.28 pp while utility models switch from sustained growth to marked decline (-7.55 pp). Second, hierarchical clustering on the 50 most active firms reveals nine qualitatively distinct response profiles, including substituting digitalization firms (cluster 5) and stable industrial giants (cluster 4) as two contrasting resilience pathways. Third, while digitalization functions as a substantive mechanism within cluster 5, a cross-sectional test on the broader industrial subsample fails to identify it as a transversal mechanism (r = -0.29, p = 0.05), delimiting digitalization as a sector-specific rather than general adaptation lever. The size-divergence gradient documented in robustness analyses (Q1 firms display approximately four times the divergence of Q4 firms) is consistent with stronger small-firm dependence on filing-stage subsidies. These findings suggest that economic literature on Chinese patenting subsidies should move beyond average-effect approaches toward explicit characterization of qualitative heterogeneity, with broader implications for innovation policy design in contexts marked by firmlevel heterogeneity.

Keywords: Utility models; Policy evaluation; Invention patents; Hierarchical clustering; Heterogeneous firms; China; Innovation policy; Patent subsidies; Subventions au patenting; Politique d'innovation; Chine; Hétérogénéité des firmes; Clustering hiérarchique; Modèle d'utilité; Brevets d'invention; Évaluation des politiques publiques (search for similar items in EconPapers)
Date: 2026-05-24
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