Firm Patenting Research Articles

The Penrose effect in the internationalization of professional service firms: an analysis of Japanese patent firms

The Penrose effect in the internationalization of professional service firms: an analysis of Japanese patent firms

Do high administrative‐level cities promote firm technological innovation? A novel analysis based on patent applications

AbstractThis paper examines the impact of China's administrative hierarchy of cities on firm innovation through the incentive policies that mobilize local governments to promote firm innovation. Using difference‐in‐differences approach, this paper finds that high‐level cities significantly and robustly enhance the number of firm patents. The results also suggest that alleviating firm financing constraints and leveraging human capital advantages are important mechanisms. In addition, high‐level cities mainly facilitate non‐state enterprises and small firms, and the quality of utility model patents was significantly lower and the quality of invention patents was higher in high‐level cities. This paper also presents several policy implications.

Can IP tribunals increase firm patent applications?—Empirical evidence from China

This paper aims to examine whether property rights protection can enhance firm innovation. To address the endogeneity problem and establish a causal relationship, we adopt the establishment of Intellectual Property Tribunals (IP Tribunals) in China as a natural experiment and employ the Difference-in-Differences (DiD) approach for estimation. By measuring firm innovation via patents and invention patent applications, we find that establishing IP Tribunals can significantly boost firm innovation. Furthermore, we investigate the heterogeneity of our baseline results and discover that privately-owned firms, smaller-sized firms, non-high-tech firms, and firms located in less marketized areas experience a larger improvement in innovation. This finding suggests that this institutional improvement provides greater protection to disadvantaged firms. Breaking regional protectionism and relaxing firm financing constraints are two possible mechanisms through which IP Tribunals can enhance firm innovation. Our results provide new evidence on how institutional change affects economic growth in China.

Impact of technical barriers to trade measures on innovation – evidence from chinese manufacturing firms

ABSTRACT This study continues the discussion of the relationship between globalization and innovation. Unlike existing studies, this paper shifts attention to the impact of changes in the trade environment caused by Technical Barriers to Trade (TBT) measures on innovation. With Chinese Manufacturing firms’ micro panel dataset and using the number of firm patent applications as a proxy variable to measure innovation, we empirically test the effect of TBT measures on this innovation. This study further distinguishes the heterogeneous effects of the total TBT measures and highly restrictive measures among them. The main estimation results indicate that the total amount of TBT measures imposed by trading partners does not significantly affect the number of patent applications by Chinese exporting firms. However, highly restrictive TBT measures demonstrate a significant negative effect. This once again proves that not all TBT measures are harmful. In addition, we obtained more interesting results through further heterogeneity analyses.

FDI deregulation and firm innovation: Evidence from firm patents

This paper studies whether inward FDI deregulation promotes innovation by firms in the host country. A theoretical framework, in which the entry of additional foreign firms is associated with both spillover and competition effects, is built to guide the empirical evaluation. Exploiting data on Chinese firm-level patents in a difference-in-differences setting, this paper finds a positive and significant impact of FDI deregulation on firm innovation. Moreover, we find that FDI deregulation had a heterogeneous effect on firms: the impact was prominent on firms with high productivity while being insignificant on firms with low productivity.

The impact of stakeholder orientation on innovation: An empirical investigation on firm patenting activity

The impact of stakeholder orientation on innovation: An empirical investigation on firm patenting activity

The Influencing Mechanism of High-Speed Rail on Innovation: Firm-Level Evidence from China

There is an urgent need to change the economic development mode from “resources driven” to “innovation driven” with the stagnation of the economy in China. Most existing research on the effect of high-speed rail (HSR) on firm innovation has lacked theoretical support and empirical evidence of firm innovation through knowledge spillover. This study introduces HSR as a cost coefficient to the classical heterogeneous firm model to construct a theoretical framework to determine the impact of HSR on firms’ innovation output. By matching the data of listed firms with the data of prefecture-level cities, the general difference-in-differences (DID) method is used to explore the impact of HSR on firm innovation and its mechanism. The research shows that the construction of HSR has a significant effect on the number of applied patent and authorized patents of firms and that there is a marginal increasing trend relating to the density and timing of HSR. The study found that in peripheral cities, firms in industries with rapid technological advances and highly innovative behaviors benefit more from HSR. HSR is associated with knowledge spillover within and between central and peripheral cities. It also has a heterogeneous sorting effect bounded by city size that promotes highly educated talent and the innovative output of firms that becomes significant only after the population size of a city reaches a certain threshold. HSR stimulates firm innovation mainly by improving the effect of firm resource allocation, promoting the spillover effect of innovation due to the flow and aggregation of resources, and increasing the scale effect of market expansion. Therefore, when designing innovation policies, the role of improving the construction of transportation to increase the frequency of face-to-face communication should be included, thus promoting the flow of knowledge and research collaboration.

Truly standard‐essential patents? A semantics‐based analysis

AbstractStandard‐essential patents (SEPs) have become a key element of technical coordination via standard‐setting organizations. Yet, in many cases, it remains unclear whether a declared SEP is truly standard‐essential. To date, there is no automated procedure that allows for a scalable and objective assessment of SEP status. This paper introduces a semantics‐based method for approximating the standard essentiality of patents. We provide details on the procedure that generates the measure of standard essentiality and present the results of several validation and robustness exercises. We illustrate the measure's usefulness in estimating the share of true SEPs in firm patent portfolios for several telecommunication standards.

When Diversity Met Integration: The Role of Ethnic Integration on Firm Performance

Extensive interest in human capital ethnic diversity has produced somewhat conflicting findings on the benefits of human capital diversity in the strategic management literature. I argue that human capital ethnic diversity cannot be standalone without considering its integration. Building on previous research on human capital diversity and integration, I examine whether both are indeed required to increase firm performance and investigate the extent to which firms should achieve diversity and integration. By proposing a simple measure of excessive ethnic imbalance at a firm, I illustrate how and why ethnic integration is as crucial as ethnic diversity to the firm's innovation outcomes. The empirical analyses on the patent data from all U.S. patenting firms provide support for the importance of ethnic integration in the firm.

Firm patenting and types of innovation. An empirical investigation on patenting determinants in developing countries

ABSTRACT The literature has accumulated numerous pieces of evidence and trends as far as developed countries’ firm patenting is concerned. To date only a small amount of information concerning developing countries’ firm patenting is available. This paper contributes to the literature by accounting for the determinants of firm patenting in developing countries. The core assumption of this paper is that the occurrence of firm patenting is positively related to innovation strategies. As a result, we place the emphasis on the diverse ways to innovate and we identify their effects on a firm’s probability to patent. Our findings indicate that despite the weaknesses of the patenting systems in developing countries, the probability to patent an innovation occurs when it is new to the market type, whether it is a product or a process (after controlling for many other effects).

Today’s baton and tomorrow’s vision: The effect of strengthening patent examination system on corporate innovation strategies

This study examines the role of strengthened patent examination system in shaping firms’ innovation activities. We find that strengthening patent examination system discourages the strategic use of patents and stimulates efforts toward substantive innovation that develops novel technologies. We identify two boundary conditions, namely technology intensity and ownership type, which regulate the impact of the strengthened patent examination system on firms’ innovation strategies. We further reveal that the post-reform changes in corporate innovation strategies lead to an improvement in the overall quality of innovation output, which results in improved firm financial performance. This study contributes to the research on the impact of patent system changes on innovation, and also the research on firm patenting trends by linking to standards of patent examination. Our findings provide valuable insights for policymakers and scholars in patent policy reforms.

Patent management: the prominent role of strategy and organization

PurposeThe purpose of this article is twofold; to verify the existence of different profiles of firms based on the level of sophistication of their patent management core processes and to test the impact of the interplay between two patent management supporting dimensions, namely patent strategy and organization for patenting, on the level of sophistication of patent management core processes.Design/methodology/approachThe method consists of a survey study, collecting data from a set of European patent management professionals. These data are analyzed with factor analysis, cluster analysis and regression analysis to test several hypotheses.FindingsThe results show that patent strategy positively and significantly impacts patent management sophistication, and that the patent organization positively moderates this relationship. In other words, a patent strategy, supported by a well-developed patent organization and culture, will positively influence the processes of managing a firm's patent portfolio.Originality/valueThis study is, to the authors’ knowledge, the first one to provide quantitative evidence that supports the notion that it is important to take a strategic and organizational perspective of patent management.

Dynamics of First-Time Patenting Firms

Dynamics of First-Time Patenting Firms

Dynamics of First-Time Patenting Firms

Dynamics of First-Time Patenting Firms

Innovation policy and firm patent value: evidence from China

This study aims to contribute to the empirical literature that evaluates the impact of the Science & Technology (S&T) Outline, a Chinese innovation policy implemented in 2006, measured by the scale of patent value. We first create a comprehensive patent valuation model (CPVM), derived from the extended patent renewal model and a variety of feature indices, to measure a firm’s patent value. From a database with over 700,000 Chinese patents from 1985 to 2013, we find that the patent value increases after the release of the S&T Outline, and the scale of patent value after 2006 is about 26.52 times more than that before 2006. Further, we use a quasi-difference in differences (DID) model to estimate the growth effect caused by the innovation policy. The results indicate that the S&T Outline had a significant effect on the promotion of patent value, in industries with high patent intensity. Considering the lag effect of the S&T Outline, we construct innovation correlation networks to visualise and compare its promotion effect. We find that regional networks have a gathering tendency after policy implementation, while industrial networks have a decentralising tendency.

Does directors’ innovation experience promote firm innovation? Evidence from China

ABSTRACT From the perspective of knowledge specificity and resource dependence, this study takes A-share listed companies in Shanghai and Shenzhen from 2014 to 2019 as samples to explore the impact of directors’ innovation experience on the innovation behaviour of listed companies. We find that directors’ rich innovation experience can not only increase their willingness to carry out innovation activities, but also strengthen their innovation ability and ultimately improve the firm’s innovation output. Moreover, the intensity of R&D investment and the one-time pass rate of firm patent applications play a partial mediating role between director innovation experience and a firm’s innovation output, respectively. This study provides references for firms to effectively use the external experience to promote innovation behaviour and complements existing research on firms’ knowledge acquisition paths. It also has practical significance for Chinese listed firms in carrying out innovation activities and strengthening innovation ability.

How does firm innovation size affect the timing of technology licensing? Theory and evidence from China

Abstract Previous research has highlighted the importance of firm size for the propensity of technology licensing. However, the currently available knowledge regarding how firm innovation size affects the timing of technology licensing is limited, especially in developing economies such as that of China. Therefore, in the context of the Chinese patent system, this article builds a model for the timing decision of technology licensing from the perspective of licensors. This model theoretically reveals the relationship between firm innovation size and the likelihood of technology licensing at different time points. This article argues that there is a positive relationship between firm innovation size and the likelihood of technology licensing before the patent disclosure date; moreover, there is an inverted U-shaped relationship between the firm innovation size and the likelihood of licensing between the patent disclosure date and the grant date; however, firm innovation size is negatively correlated with the likelihood of licensing after the patent grant date. Empirical results based on 8737 first-time licensing data on invention patents of Chinese firms in 2001–2015 support all predictions. This study contributes to both the scholarly understanding of timing decision making in firms’ technology licensing and the design of technology transfer policies for different firms in China.

“Cleaning the Closet”: Examining Firm Patent Sales Through the Lens of Absorptive Capacity

We examine firm sales of patents, which are a characteristically valuable firm resource. Using the lens of absorptive capacity, and specifically, its components of recognition, assimilation, and commercialization ability, we surface heretofore underappreciated mechanisms that underpin firm patent sales. We first propose that while the firm's recognition ability will enable and encourage firms to seek out and acquire patents, intrinsic resource capacity limitations associated with its patent portfolio will motivate the firm to “clean its closet” and sell some of its existing patents to free resources and allow new patents to enter its portfolio. We further propose that the firm's assimilation and commercialization abilities can help to ease the firm's capacity constraints, and will, thus, temper the positive relationship between the firm's recognition ability (and patent purchases) and patent sales. As one of a small but growing collection of empirical tests on patent sales, we find support for our hypotheses using a large, cross-industry sample of 1728 public firms observed from 1975 to 2010. In so doing, we provide an absorptive capacity-based explanation for the understudied but strategic question of why firms sell their patents.

Environmental regulation and green innovation: Evidence from China’s new environmental protection law

This study investigates the impact of China’s new Environmental Protection Law on the green innovation behaviour of listed companies in high-polluting industries. The implementation of China’s strict and new Environmental Protection Law provides a quasi-natural experimental setting for examining the causal effect of environmental regulation on corporate green innovation. Based on data of the application for environmental patents of high-polluting firms listed in Shanghai and Shenzhen Stock Exchanges from 2010 to 2017, this study analyses the change in the green innovation behaviour of firms after the implementation of China’s new and stringent Environmental Protection Law using the PSM-DID approach. We find that firms tend to file more applications for environmental patents, including patents for inventions and utility models after the implementation of the new Environmental Protection Law. Further analysis shows that while this effect is stronger for state-owned enterprises, it is weaker for firms headquartered in cities where economies depend more on the secondary industry. Firms in concentrated industries have more incentive to file applications for green invention patents than those in competitive industries. The study has important implications for policy makers on better implementing the environmental protection law in developing countries.

Information Leakage, Imitation, and the Patent System

From a firm’s perspective two competing forces are driving the decision to invest in innovation. On the one hand, innovative performance is an important driver of profitability and growth. On the other hand, investments in innovation suffer from negative externalities, i.e. spillovers to other firms, and hence imitation could be induced. To preempt imitation firms may protect their inventions by means of intellectual property rights, such as patents. By taking out a patent, however, a firm also conveys information about the functioning of the invention to competitors. In this empirical paper, we highlight the trade-off of patenting by setting up a recursive system of equations on knowledge leakage and imitation that, among other factors, may be partly determined by firms’ patenting activity. Thereby we contribute to the debate on the functioning of the contemporary patent system. We find that patenting firms are being less confronted with imitation. The effect of patents on the dissemination of R&D findings is, however, insignificant. Therefore, we conclude that patent disclosures do not significantly harm the appropriability conditions for inventions, but help to protect, at least partly, against imitation, as it has been originally envisaged by policy.