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Innovation meets governance: Design patent activities’ impact on corporate success

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  • Xie, Sisi
  • Tong, Zhenghao

Abstract

This study examines the impact of design patent activities on corporate performance and explores the moderating influence of corporate governance on this relationship. Using a comprehensive dataset of Chinese listed companies spanning 2018–2023, we measure design patent activities through multiple dimensions, including independently filed patents, jointly filed patents, total patents granted, and average time to grant and construct a composite Design Patent Index. We proxy corporate governance characteristics using board size and institutional ownership. Empirical analysis based on a final sample of 8762 firm–year observations, reveals that design patent activities are positively correlated with corporate performance. Corporate governance significantly strengthens this positive association. The findings remain robust after controlling for year-specific factors. This study contributes to the literature by highlighting the strategic value of design patents in enhancing firm performance and emphasizes the critical influence of governance mechanisms on facilitating the effective transformation of innovation output into financial gains. The results offer practical implications for corporate managers and policymakers aiming to promote innovation-driven growth.

Suggested Citation

  • Xie, Sisi & Tong, Zhenghao, 2025. "Innovation meets governance: Design patent activities’ impact on corporate success," Finance Research Letters, Elsevier, vol. 85(PE).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pe:s1544612325015478
    DOI: 10.1016/j.frl.2025.108293
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    References listed on IDEAS

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