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Intellectual property rights protection and firm innovation: Evidence from half million firms in China

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  • Dai, Bochuan
  • Ma, George Chao
  • Shen, Tao

Abstract

We examine the impact of intellectual property rights (IPR) protection on local private firm innovation. Using the implementation of local patent dispute jurisdiction in China as exogenous shocks, we show that private firm patenting activities in cities with jurisdiction are significantly higher than those in cities without local jurisdiction. Consistent with our hypotheses, the effect is more prominent for firms in cities that have different cultural disparity from their provincial capital cities and in cities with a better judicial environment. We provide additional evidence that access to capital, innovation efficiency, city development, and industry competition can influence the effect of local IPR protection in the expected way. Our paper highlights the importance of proximity and accessibility to local patent dispute jurisdiction for promoting private firm innovation in China.

Suggested Citation

  • Dai, Bochuan & Ma, George Chao & Shen, Tao, 2025. "Intellectual property rights protection and firm innovation: Evidence from half million firms in China," Journal of Comparative Economics, Elsevier, vol. 53(4), pages 977-1000.
    • Handle: RePEc:eee:jcecon:v:53:y:2025:i:4:p:977-1000
    DOI: 10.1016/j.jce.2025.07.003
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    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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