Invention Patent Applications Research Articles

Financial geographic structure and innovation quality: Evidence from Chinese firms amid economic policy uncertainty

In countries where indirect financing dominates, the geographic distribution of financial resources to firms is crucial in enhancing credit availability and improving innovation quality. This study examines the impact and heterogeneity of financial geographic structure on firm innovation quality. Using the number of bank branches surrounding Chinese listed companies as a proxy for financial geographic structure, we employ a multidimensional fixed effects model and Heckman's two-stage method, finding that a higher density of bank branches significantly enhances firms’ access to credit. This fosters innovation by increasing invention patent applications in high-tech non-state-owned enterprises and green patent applications in non-high-tech state-owned enterprises. However, as economic policy uncertainty increases, the positive effect of financial geographic structure on firm innovation diminishes. Hence, countries facing substantial policy uncertainty and relying on indirect financing must strengthen multilevel financial markets and encourage commercial banks to provide greater support for firms pursuing higher levels of innovation.

Digital technology innovation and corporate resilience

This study identifies over 220,000 digital invention patent applications for digital invention and creates an index of enterprise-level digital technology innovations. Using an empirical analysis based on a two-way fixed-effects model, this study examines the impact of digital technology innovation on enterprise resilience. Results show that digital technology innovations improve enterprise resilience. This improvement is mainly achieved by reducing internal and external information asymmetry, reducing operating costs, improving management levels and operational efficiency, and increasing market profitability and sustainable earning capacity. Moreover, this study extracted all announcements containing phrases such as “strategic alliance,” “strategic co-operation,” and “business alliance” from 3.208 million announcements on the JUCHAO website and further filtered them to select those strategic alliances in digital technology as their content of collaboration and identified them as digital technology strategic alliances. The findings show that companies that join digital technology strategic alliances have a greater impact on improving enterprise resilience. Furthermore, this study found that digital technology innovation can significantly improve the enterprise resilience with better network infrastructure and a more comprehensive intellectual property protection system. This study expands the research scope of the microlevel effects of the digital economy and provides valuable insights for governments to optimize digital economy policies and enterprises to develop digital innovation strategies.

How do corporate patenting strategies adapt to public health crises?

ABSTRACT By exploiting the health emergencies in China, we investigate the strategic reactions concerning patenting strategies to public health crises. Results show that firms maintained innovation input levels during the Severe Acute Respiratory Syndrome (SARS) period. Moreover, firms relied more on past technological paths and became technologically more specialized, as responses to SARS. In addition, we find that the main effects are weaker among pharmaceutical companies and that there is a positive treatment effect on invention patent applications and grants. Our findings remain valid after accounting for potential endogeneity problems with a variety of robustness tests.

Do anti-corruption efforts improve corporate innovation? Evidence from China

ABSTRACT This article examines the effects of anti-corruption efforts on firm innovation in China. Based on the number of invention patent applications filed by firms, we find that firms located in areas with intense anti-corruption efforts are more innovative. We control for a broad set of firm and province characteristics, including industry-year fixed effects, and demonstrate the robustness of the results using an instrumental variable analysis, alternative proxies for anti-corruption intensity and innovation and a fixed-effect Poisson regression model. A heterogeneity analysis shows that the innovation-enhancing effects of anti-corruption efforts on the likelihood to apply for invention patents is greater for young companies and those without political connections, while no significant difference when conditional on having invention patent applications. Moreover, anti-corruption efforts have no significantly different effects between state-owned and private enterprises. Further analysis shows that anti-corruption efforts significantly increase investments in research and development and innovation efficiency, leading to enhanced productivity and firm growth in the following years.

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.

The US–China trade war and corporate innovation: Evidence from China

AbstractThis study investigates the effect of the US–China trade war on corporate innovation in the context of China. We find that the first‐order effect of the trade war on corporate innovation is significantly negative. That is, Chinese firms exposed to the US–China trade war have lower numbers of patent applications and invention patent applications. Underlying mechanisms include reductions in market expansion and innovation input. Our findings are more pronounced for firms connected to the United States and those suffering financial distress and for non‐state‐owned enterprises. We further contribute to the literature by showing that firms with developed managerial ability, more confident managers, and better corporate social responsibility performance tend to increase innovation for competitiveness in response to the trade war. Finally, we explore the effect of Chinese retaliatory tariff shocks on corporate innovation and find that US tariffs and Chinese retaliatory tariffs hinder corporate innovation in China.

A timely helping hand: China‐U.S. Trade War, government subsidy, and firm innovation

AbstractThis paper investigates the impact and mechanism of the China‐U.S. trade war on firm innovation in China exploiting the trade war as a quasi‐natural experiment using firm‐level data from 2015 to 2020. We apply textual analysis to annual reports of listed firms to identify treatment and control groups. Our DID estimates show that while the trade war is a negative shock, it has increased the number of total patent applications, invention patent applications, and non‐invention patent applications by 6.0%, 3.7%, and 4.1%, respectively. We also observe that government subsidies could help firms resist adverse shocks on time with more innovation outcomes. Furthermore, we find the pertinence of government subsidy. The government tended to grant subsidies to firms that have trade connections with the U.S. and firms would use subsidies for R&D to increase innovation. Overall, we find that the trade war prompts the government to increase subsidies for firms, thereby boosting innovation.

An Empirical Study of the Policy of Low-Carbon City Pilot on the Level of Green Technological Innovation

<p class="MsoNormal" style="text-align: justify;"><span style="font-family: 'times new roman', times, serif; font-size: 14pt;">The low-carbon city pilot is an important policy for promoting sustainable development and addressing climate change. The level of green technological innovation is a significant driving force for China's transition to high-quality development and the realization of carbon peaking and carbon neutrality goals. This essay takes the panel data of 30 provinces in China from 2008 to 2020 as the research sample, regards the number of urban green invention patent applications as a quantifiable indicator of the level of urban green technological innovation, and takes the policy of low-carbon city pilot as a quasi-natural experiment, and uses the difference-in-differences model to test the impact of low-carbon city pilot on the level of urban green technological innovation, and to investigate the mechanism of action within. The main conclusions are as follows: (1) The policy of low-carbon city pilot has an outstanding promotion effect on the level of urban technological innovation. (2) Using the mediating effect to analyze, it is found that the low-carbon city pilot policy can improve the level of urban green technological innovation through the development of green finance.</span></p>

Bank Digital Transformation and Enterprise Innovation—Evidence from China

With the rapid advancement of digital technology, the banking industry has embarked on a journey of digital transformation. While existing literature primarily examines how these changes impact the banks themselves, our study focuses on a relatively unexplored aspect: the direct influence of bank digital transformation on the performance and behavior of borrowing enterprises. The research objective of this study is to explore the influence of bank digital transformation on the innovation performance of borrowing enterprises and the underlying mechanisms. Leveraging data from Chinese listed companies and commercial banks, we find a positive effect of bank digital transformation on enterprise innovation output as measured by firms’ patent applications. The findings remain robust across alternative model specifications, controls for regional digital economy development levels, and bank financial performance, as well as alternative measures of bank digital transformation. Mechanism tests show that bank digital transformation contributes to corporate innovation by alleviating corporate financial constraints and improving corporate governance. Further research demonstrates that bank digital transformation also helps promote corporate innovation efficiency as measured by the proportion of patent output to total R&D input and corporate innovation output as measured by firms’ invention patent applications and patent grants. Additionally, borrowing firms’ own digital transformations may substitute for bank digital transformation in their effect on innovations.

Empirical insights into industrial policy's influence on phytoprotection innovation.

Intelligent Phytoprotection is an important direction for the modern development of plant protection related disciplines, and its essence is the innovative application of new generation information technology industry, high-end equipment manufacturing industry, and digital industry related technologies in the traditional plant protection field. This article first identifies 224 International Patent Classification (IPC) Main groups in the field of intelligent phytoprotection technology based on the International Patent Classification System. And then combines with China's industrial policy practice, we explore the impact of industrial policy on the application number of invention patents in the field of intelligent phytoprotection technology using the Difference-in-difference (DID) method and the Synthetic DID method. The study results showed that the implementation of industrial policy can significantly promote the patent application activities in the intelligent phytoprotection treatment group, with an average increase of 517 invention patent applications compared to the control group that is not affected by the policy. The research conclusion of this article suggests that for countries and regions, industrial policies are an important tool for promoting the innovation and development of intelligent phytoprotection related technologies.

THE POLICY EFFECT OF CARBON EMISSIONS TRADING ON GREEN TECHNOLOGY INNOVATION — EVIDENCE FROM MANUFACTURING ENTERPRISES IN CHINA

Based on the panel data of listed Chinese manufacturing enterprises from 2007 to 2019, this study uses the difference-in-differences-based propensity score matching method (PSM-DID) to explore the policy effect of carbon emissions trading on green technology innovation in manufacturing from the perspective of independent innovation of enterprises. The conclusions of this study show that: (1) Carbon emissions trading has significantly improved the level of green technology innovation of manufacturing enterprises; (2) the policy effect of carbon emissions trading on the green patent application is more than twice as much as on green utility model patent application. Compared with green utility model patent, the pilot policy of carbon emissions trading has a more significant and greater policy effect on the green invention patent application; (3) the private enterprises are more sensitive to the pilot policy of carbon emissions trading than state-owned enterprises (SOEs). The carbon emissions trading in China effectively promotes low-carbon and green development of enterprises.

Can patentee preference in patent infringement dispute resolution impact innovation?

Evaluating the impact of intellectual property protection on innovation should include multiple perspectives, of which the impact of patent infringement remedies is an indispensable perspective. The two options for resolving patent infringement disputes in China include civil litigation (CL) and administrative adjudication (AA). Despite the fact that the judicial system has been emphasized as playing the leading role in intellectual property protection, patentees have shown a strong preference for AA since 2015. The general application of AA had been criticized by scholars. Does the patentee's preference bring inappropriate protection and stifled innovation? This study used regression models and 2008–2020 data on the choice of patent dispute resolution mode in China. The number of invention patent applications was the dependent variable, and choices for CL or AA were the independent variables. The choice of AA and the invention patent application were found to have a significant and positive association, implying that AA provides an appropriate level of intellectual property protection to incentivize innovation. Characteristics derived from AA should be valued and used as a reference to improve innovation policies.

Direct Tax Burden, Financing Constraints, and Innovation-Based Output

Tax and fee reductions serve as pivotal instruments in the deepening of structural reforms on the supply side and constitute a significant element of China’s proactive fiscal policy. Although China’s tax regime encompasses both direct and indirect tax burdens, the direct tax burden directly impacts the operational costs of firms and remains non-transferable. As such, it holds significant influence over corporate growth trajectories. A decrease in the direct tax burden alleviates financing constraints for firms, subsequently reducing their exposure to business risks. Focusing on the innovative output capabilities of firms, this study analyzes A-share-listed companies on the Shanghai and Shenzhen stock exchanges from 2010 to 2021. It aims to ascertain the influence of direct tax burden reductions on innovation output within the tax and fee reduction framework. The findings indicate that lessening the direct tax burden ameliorates financing constraints, thereby enhancing a firm’s innovative output capabilities. A deeper analysis reveals that non-state-owned enterprises benefit more significantly from this dynamic than their state-owned counterparts, underscoring the potential for targeted tax and fee reduction policies to bolster enterprise innovation. Furthermore, the government should recognize enterprise differentiation and drive broader economic growth through tailored strategies. Notably, the positive impact of mitigating financing constraints on innovation is more pronounced in firms with suboptimal corporate governance structures. While this mechanism notably influences non-invention patent applications, its effect on invention patent applications is comparatively muted. Post-outbreak, the interplay between tax burdens and innovative outputs has intensified, becoming more pronounced than in pre-outbreak times.

Spatial spillover effects of a carbon trading policy on green technology innovation in China.

A carbon market is a widely used policy tool worldwide. This study employs a difference-in-differences (DID) model to estimate the impact of a carbon trading policy on green technology innovation and applies a spatial DID (SDID) model to investigate its spatial spillover effects. The findings suggest that China's carbon market effectively promotes green technology innovation, as green invention patent applications for listed enterprises increase by 28.8% when implementing the carbon trading policy. Moreover, implementing a carbon trading policy promotes local green technology innovation and has spatial spillover effects on neighboring cities. Furthermore, heterogeneity test results show that the spatial spillover effects differ by geographical region, economic development levels, ownership type (state-owned and non-state-owned enterprises), and degree of government intervention. Therefore, we suggest enhancing enterprises' technological innovation by providing policy support and prioritizing the development of carbon markets in regions with high economic development levels.

Patent signal and financing constraints: a life cycle perspective and evidence from new energy industry

Based on the data of China’s new energy listed companies, this paper empirically studies the impact of the patent signal on the financing constraints of new energy enterprises and its mechanism. The results show that: (i) Both the invention patent application and the non-invention patent application can play a signaling role to alleviate the financing constraints of new energy enterprises; (ii) Analyst attention plays an intermediary role between the patent signal and the financing constraints of new energy enterprises. Compared with non-invention patents, analyst attention plays a more vital intermediary role on invention patents; (iii) Patent signal can alleviate the financing constraints of new energy enterprises in the growth and maturity stages by increasing analyst attention but has no apparent effect on the recession period; (iv) Compared with non-main board listed and small-scale new energy enterprises, patent signal has a more substantial effect on alleviating the financing constraints of main board listed and large-scale new energy enterprises.

Symbolic or substantial? Different responses of state-owned and privately owned firms to government innovation policies

What influences a firm's response to government innovation policies? This study draws upon the institutional logic perspective to propose that China's state-owned enterprises, guided by state logic, are more likely to make a substantial response to such policies—a response that takes the form of the increased volume of invention patent applications, a steady grant rate, and market-related expenses. In contrast, private firms, guided by market logic, are more likely to make a symbolic response in terms of the increased volume of invention patent applications, a reduced grant rate, and increased market-related expenses and revenues. Results from our study, which uses a quasi-experimental approach based on an exogenous government innovation policy and data on publicly listed Chinese companies, support our arguments. These findings deepen the scholars' understanding of the effects of policy on state-owned and private firms.

Human Capital and Firm Innovation: Evidence from China’s Higher Education Expansion in the Late 1990s

ABSTRACT In this paper, we take the “university enrollment expansion” policy implemented by the Chinese government in 1999 as a quasi-natural experiment and use the difference-in-differences method to identify the effect of human capital expansion on firm innovation. Findings suggest that human capital expansion significantly improves firm innovation performance. More innovation is realized by promoting firms’ invention patent applications than their design and utility model patent applications. Further analysis highlights the varying impact of human capital expansion on the innovation performance of firms of different types, thus indicating significant heterogeneity. This study enriches the innovation literature on the drivers of firm innovation by identifying the role of human capital while providing new empirical evidence from the perspective of firm innovation to further understand the microeconomic effects of human capital.

Exploring the impact of industrial robots on firm innovation under circular economy umbrella: a human capital perspective

PurposeA new round of technological revolution is impacting various aspects of society. However, the importance of technology adoption in fostering firm innovation is underexplored. Therefore, this study aims to investigate whether robot adoption affects technological innovation and how human capital plays a role in this relationship in the era of circular economy.Design/methodology/approachBased on the robot adoption data from the International Federation of Robotics (IFR) and panel data of China's listed manufacturing firms from 2011 to 2020, this study uses regression models to test the impact of industrial robots on firm innovation and the mediating role of human capital.FindingsThe results demonstrate that the adoption of industrial robots can significantly promote high-quality innovation. Specifically, a one-unit increase in the number of robots per 100 employees is associated with a 13.52% increase in the number of invention patent applications in the following year. The mechanism tests show that industrial robots drive firm innovation by accumulating more highly educated workers and allocating more workers to R&D jobs. The findings are more significant for firms in industries with low market concentration, in labor-intensive industries and in regions with a shortage of high-end talent.Research limitations/implicationsDue to data limitations, the sample of this study is limited to listed manufacturing firms, so the impact of industrial robots on promoting innovation may be underestimated. In addition, this study cannot observe the dynamic process of human capital management by firms after adopting robots.Practical implicationsThe Chinese government should continue to promote the intelligent upgrading of the manufacturing industry and facilitate the promotion of robots in innovation. This implication can also be applied to developing countries that hope to learn from China's experience. In addition, this study emphasizes the role of human capital in the innovation-promoting process of robots. This highlights the importance of firms to strengthen employee education and training.Social implicationsThe adoption of industrial robots has profoundly influenced the production and lifestyle of human society. This study finds that the adoption of robots contributes to firm innovation, which helps people gain a deeper understanding of the positive impacts brought about by industrial intelligence.Originality/valueBy exploring the impact of industrial robots on firm innovation, this study offers crucial evidence at the firm level to comprehend the economic implications of robot adoption based on circular economy and human perspectives. Moreover, this study reveals that human capital is an important factor in how industrial robots affect firm innovation, providing an important complement to previous studies.

The Impact of the Digital Economy on Carbon Emissions from Cultivated Land Use

Is digitalization conducive to promoting carbon reduction in cultivated land use while empowering high-quality socio-economic development and intelligent territorial spatial planning? Derived from China’s provincial panel data from the period 2011 to 2019, in this paper, we employ a fixed-effect model to study the impact of the digital economy on carbon emissions from cultivated land use and apply an intermediary-effect model to estimate the impact that the structure of the digital economy has on carbon emissions from cultivated land use. The results indicate the following: (1) The expansion of the digital economy can significantly decrease the carbon emissions caused by cultivated land use. This conclusion is still valid after considering endogenous issues and conducting a series of robustness tests. (2) Green technical renovation has played a significant intermediary role in the effect the digital economy has on the amount of carbon emissions from cultivated land use. (3) Digital economy development has significantly promoted innovation in green technology by increasing the size of green invention patent applications and authorizations, thus effectively curbing carbon emissions from cultivated land use and achieving the carbon emission reduction effect of the digital economy. However, some suggestions are put forward, including speeding up the deep integration of digital technology and cultivated land use planning, strengthening the application of green technical renovation achievements in the agricultural field, and enhancing the government’s function in the institutional guarantee of the growth of the digital economy.

The negative effects of the US-China trade war on innovation: Evidence from the Chinese ICT industry

Many countries, including China, have gradually realized the importance of leading innovation capabilities in the world market. The innovation capabilities of the information and communication technology (ICT) industry have received widespread attention as an important means to stimulate a productivity revolution in the new era and its innovative development. This paper adopts a differences-in-differences method and treats the US-China trade war as a quasi-natural experiment to empirically analyze its impact on technological innovation in the Chinese ICT industry. The results find that the US-China trade war has a significant negative impact on ICT firms' technological innovation, mainly by increasing their operating costs, and that the negative impact of the trade war is much greater than the positive impact from the reverse incentive effect. Moreover, the decline in technological innovation of ICT firms is mainly due to the reduction in innovation efficiency caused by the decrease in the number of patent applications for inventions with the highest technological content, rather than the change in R&D investment. In the US-China trade war, firms with low financing constraints and non-state enterprises are more significantly affected. Thus, it can be seen that the intention of the US-China trade war to inhibit the development of Chinese high-technology firms has been achieved to a certain extent, which requires new countermeasures from the Chinese government.