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Does intellectual property protection promote green innovation in firms? A perspective on R&D spillovers and financing constraints

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  • Xiaoyuan Gao
  • Yixin Zhao

Abstract

Although the literature has assessed the impact of Intellectual property protection on urban innovation, there is still a gap in the assessment of the impact of green innovation at the firm level. This study constructs a multi-period differences-in-differences (DID) model using China’s Intellectual Property Demonstration Cities (IPDC) as a quasi-natural experiment to investigate the impact of IPDC on corporate green innovation. The findings indicate that (1) the IPDC program significantly stimulates corporate green innovation and has long-term effects. This finding still holds after using PSM-DID as well as robust IW estimators. (2) Mechanism analysis suggests that IPDC can promote firms’ green innovation by reducing R&D spillover losses and alleviating financing constraints. (3) Heterogeneity tests show that the IPDC program has a more significant promotion effect on small, state-owned, growth-stage firms. Based on the above findings, this study provides policy implications for enhancing intellectual property protection to stimulate corporate green innovation.

Suggested Citation

  • Xiaoyuan Gao & Yixin Zhao, 2023. "Does intellectual property protection promote green innovation in firms? A perspective on R&D spillovers and financing constraints," PLOS ONE, Public Library of Science, vol. 18(11), pages 1-18, November.
    • Handle: RePEc:plo:pone00:0288315
    DOI: 10.1371/journal.pone.0288315
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