Working Paper: NBER ID: w22685
Authors: Lily Fang; Josh Lerner; Chaopeng Wu
Abstract: Using a difference-in-difference approach, we study how intellectual property right (IPR) protection affects innovation in China in the years around the privatizations of state-owned enterprises (SOEs). Innovation increases after SOE privatizations, and this increase is larger in cities with strong IPR protection. Our results support theoretical arguments that IPR protection strengthens firms’ incentives to innovate and that private sector firms are more sensitive to IPR protection than SOEs.
Keywords: Intellectual Property Rights; Innovation; China; State-Owned Enterprises; Private Sector
JEL Codes: G24; J33; L26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| SOE privatizations (P31) | innovation (O35) |
| IPR protection (O34) | innovation (O35) |
| IPR protection + SOE privatization (O34) | innovation (O35) |
| privatization (L33) | quality of patents (L15) |
| institutional quality (IPR protection) (L15) | innovation (O35) |