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How do patent markets foster technology entrepreneurship? Regional heterogeneity evidence from China

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  • Qiu, Lu
  • Yuan, Peng
  • Xu, Kefan
  • Wei, Shuni

Abstract

We use the establishment of National Patent Exchange Centers (NPECs) as a quasi-natural experiment and apply a staggered difference-in-differences approach to evaluate the impact of patent markets on technology entrepreneurship. The results show that the NPECs significantly promote technology entrepreneurship. Mechanism analyses show that NPECs promote technology entrepreneurship by facilitating patent and capital inflows and enhancing regional innovation. Further analysis reveals that, compared with innovation-rich regions, NPECs have a more pronounced effect on the establishment of technology firms in innovation-poor regions. This disparity arises because, following the establishment of NPECs, innovation-poor regions attract an influx of patents and capital from innovation-rich regions, enhancing their innovation capacity and creating a clear “latecomer advantage” in technological catch-up. Finally, we document that patent markets exhibit significant positive spatial spillover effects on technology entrepreneurship. These results underscore that the development of patent markets not only accelerates the commercialization of scientific innovations but also fosters more balanced regional innovation development.

Suggested Citation

  • Qiu, Lu & Yuan, Peng & Xu, Kefan & Wei, Shuni, 2026. "How do patent markets foster technology entrepreneurship? Regional heterogeneity evidence from China," Economic Analysis and Policy, Elsevier, vol. 91(C), pages 1177-1202.
    • Handle: RePEc:eee:ecanpo:v:91:y:2026:i:c:p:1177-1202
    DOI: 10.1016/j.eap.2026.04.008
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    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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