Abstract
We analyse the ‘explosion’ of patent filings by Chinese residents both domestically and in the United States during the early 2000s, employing a unique dataset of 374,000 firms matching patent applications to manufacturing census data. Our analysis reveals that patenting is highly concentrated among a small number of firms, operating in the information and communication technology sector. Although increases in patent filings by these companies are partly driven by increased R&D intensity, our analysis suggests that the explosion of patent filings at the Chinese patent office is driven by factors other than underlying innovative behavior, including government subsidies that encourage patent filings directly.
Highlights
China’s economic success over the past decades has been widely regarded as the result of its ability to produce manufactured goods at low cost, building on the availability of cheap labour and scale economies, while relying on existing technologies of production
The number of domestic invention patent filings with the Chinese patent office (SIPO) has increased at an average rate of 32% per annum from around 15,600 to over 700,000 during the period 1999-2013.1 Utility patent filings by Chinese residents2 with the U.S patent office (USPTO) grew at an annual rate of 35% to nearly 15,500 over the same period, albeit from a low base of 271 in 1999.3 This patent ‘explosion’ at home and abroad is paired with strengthened statutory intellectual property (IP) rights protection (Park, 2008) and an increased interest by policymakers in the role of IP in fueling domestic innovation, with a particular focus on foreign technology transfer and incentives to invest in R&D
The trivariate probit results suggest that our matched-sample regression does not suffer significant selection bias and that estimating patenting equations for SIPO and USPTO separately only affects estimation and inference at the margin
Summary
China’s economic success over the past decades has been widely regarded as the result of its ability to produce manufactured goods at low cost, building on the availability of cheap labour and scale economies, while relying on existing technologies of production. The number of domestic invention patent filings with the Chinese patent office (SIPO) has increased at an average rate of 32% per annum from around 15,600 to over 700,000 during the period 1999-2013.1 Utility patent filings by Chinese residents with the U.S patent office (USPTO) grew at an annual rate of 35% to nearly 15,500 over the same period, albeit from a low base of 271 in 1999.3 This patent ‘explosion’ at home and abroad is paired with strengthened statutory intellectual property (IP) rights protection (Park, 2008) and an increased interest by policymakers in the role of IP in fueling domestic innovation, with a particular focus on foreign technology transfer and incentives to invest in R&D. The plan foresees a doubling of the number of patent applications filed by Chinese applicants abroad over the same time horizon These ambitious targets reflect a positive outlook in parts of the literature on Chinese innovation, the Chinese IP rights system, and Chinese development in general (Fischer and von Zedtwitz, 2004; Subramanian, 2011)
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