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Intellectual property protection, R&D investment and digital technology innovation: An empirical study based on the revision of the patent law

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  • Chen, Lei
  • Wang, Jieshuang

Abstract

The refinement and sophistication of legal frameworks have consistently served as a pivotal driving force behind technological innovation within enterprises. Leveraging the 2009 revision of China's Patent Law as a quasi-natural experiment, this study employs a difference-in-differences (DID) approach to evaluate the causal effect of enhanced intellectual property protection on digital technology innovation among A-share listed companies. The empirical results demonstrate that the legislative change significantly boosts firms' digital patent output, particularly in eastern regions, firms with lower financing constraints, and those classified as high-tech enterprises. Mechanism analysis reveals that the positive effect operates through increased R&D investment and the expansion of R&D personnel. A battery of robustness checks—including placebo tests, PSM-DID, and Heckman selection models—confirms the credibility of the findings. This study contributes to the literature by providing robust evidence on how institutional reforms in intellectual property protection can foster digital innovation through financial and organizational channels.

Suggested Citation

  • Chen, Lei & Wang, Jieshuang, 2025. "Intellectual property protection, R&D investment and digital technology innovation: An empirical study based on the revision of the patent law," International Review of Economics & Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025004836
    DOI: 10.1016/j.iref.2025.104320
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    1. Deng, Huiyuan & Ding, Bibo, 2025. "The impact of the construction policy for intellectual property demonstration cities on Chinese institutional investor shareholding," Finance Research Letters, Elsevier, vol. 86(PD).

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