Abstract
Using patent data at the provincial level from 1985 to 2010, we find that the average quality of Chinese patents has declined; thus, the dramatic rise in the number of patents most likely has not produced a proportionate increase in the country’s total innovation capacity. In addition, we find evidence that the patent promotion policies (PPPs, namely preferential tax policies, subsidies, and subsidies for patent filing and maintenance fees) adopted by various government agencies in China can explain both the quantity increase and the quality fall in Chinese patents.
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