NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Intellectual Property Rights Protection, Ownership, and Innovation: Evidence from China

Lily Fang, Josh Lerner, Chaopeng Wu

NBER Working Paper No. 22685
Issued in September 2016
NBER Program(s):CF

Using a difference-in-difference approach, we study how intellectual property right (IPR) protection affects innovation in China in the years around the privatizations of state-owned enterprises (SOEs). Innovation increases after SOE privatizations, and this increase is larger in cities with strong IPR protection. Our results support theoretical arguments that IPR protection strengthens firms’ incentives to innovate and that private sector firms are more sensitive to IPR protection than SOEs.

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Document Object Identifier (DOI): 10.3386/w22685

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