Assistant Professor Lin Jia, as the corresponding author, has published the article entitled "Investigating the real effect of China’s patent surge: New evidence from firm-level patent quality data" in the Journal of Economic Behavior & Organization, a leading journal in the field of behavioral and organizational economics.
Introduction to the Core Content of the Paper
Patent quality is one of the key indicators for measuring innovation capability. In recent years, China's patent surge has drawn widespread attention from scholars, who have sought to explore the driving forces behind this phenomenon, examine the quality of Chinese patents granted overseas, and attempt to provide indirect evidence of China's innovation capability enhancement. However, due to challenges such as data availability, existing research has rarely directly addressed the overall evolution of China’s patent quality under the backdrop of this surge and its economic effects.
This paper constructs a new database linking China’s National Intellectual Property Administration (CNIPA) patent database with Google Patents and incoPat patent quality data, combined with firm-level data from China’s Industrial Enterprises Database. It conducts an in-depth study of Chinese firms’ invention patent activities and their economic effects to investigate the evolution of China’s innovation capability.
Specifically, the paper adopts an empirical approach to examine whether China's patent surge is driven by firms' endogenous innovation decisions, particularly their in-house R&D efforts, and whether such patent growth is sustainable in the future. Utilizing a customized database and classical methods in the literature, the paper uses patent citation counts as a proxy for post-grant patent quality and the number of claims as a proxy for pre-grant patent quality. Given that large and medium-sized enterprises play a crucial role in China's patent activities, the study focuses on these firms, exploring not only the relationship between firm-level R&D and patent production but also the impact of patent stock, adjusted for quality, on output per labor, sales per labor, and total factor productivity (TFP).
The study finds that, after controlling for various levels of policy interventions and improvements in the intellectual property protection environment, a series of firm-level innovation factors (such as R&D expenditure) lead to increases in both the quantity and quality of invention patents. Moreover, the initiation of invention patent activities and the accumulation of high-quality invention patents help improve firms' output per labor, sales per labor, and TFP. This indicates that Chinese firms' conscious innovation efforts can translate into increased patenting activity and subsequently into improved economic performance, establishing a virtuous cycle that constitutes an important pathway for deepening the implementation of China’s "innovation-driven development" strategy.
However, the paper also points out several areas in the patent creation process that require policy attention. For instance, it finds that Chinese firms may focus more on short-term returns from incremental innovation, and the efficiency of R&D investment in generating invention patents (both in quantity and quality) remains below that of developed economies. The link between R&D investment and patent quality has become weaker in recent years. Therefore, future policymaking should place greater emphasis on fostering an innovation culture that tolerates failure and pursues long-term gains, with a focus on cultivating high-quality innovation and patents as a key next step. Furthermore, China’s innovation policy needs to address the imbalance of patent activities across industries and regions and should continue to evaluate and research patent behavior dynamically.
Faculty Profile
Dr. Lin Jia is a tenure-track Assistant Professor at Shanghai International College of Intellectual Property. Before joining SICIP, she served as a Research Fellow at China Europe International Business School (CEIBS). Dr. Lin holds a Ph.D. in Economics from Peking University, and a Bachelor's degree in Finance and a Master's degree in Economics from Xiangtan University. She was also a visiting scholar at the University of California, Berkeley, supported by the China Scholarship Council.
Dr. Lin's research and teaching interests focus on intellectual property and innovation, innovation economics, and development economics. Her research has been published in renowned domestic and international journals such as Journal of Economic Behavior & Organization, China Economic Review, and Economic Research Journal. She has served as a Principal Investigator for the National Natural Science Foundation of China's Youth Project (completed) and participated in several national-level research projects.
Full Article Link:
https://www.sciencedirect.com/science/article/pii/S0167268122003560?via%3Dihub
Full Citation:
Wu, Howei, Jia Lin, and Ho-Mou Wu. "Investigating the real effect of China’s patent surge: New evidence from firm-level patent quality data." Journal of Economic Behavior & Organization 204 (2022): 422-442.
