Intellectual Property Rights Design and Academic Innovation: Evidence from University Patent Ownership Reform

China has sought to promote the commercialization of patents at universities, notably through the three rights and mixed ownership reforms. These two reforms adopted different models for the allocation of university patent ownership. The three rights reform completely allocates patent ownership to the universities, while the mixed ownership approach allocates the majority of patent ownership to the inventors upon the generation of outcomes. We empirically tested the effects of the two patent ownership allocation models on the patent performance using Chinese patent data and university statistics. We found that external institutional environment influenced the anticipated outcomes of the reform pilot in both reform models. The three rights reform has a significant impact on patent licensing without affecting the quantity or quality of patents, while the mixed ownership reform has significantly increased patent sales and applications while tilting research and development toward research with relatively low creativity. This paper contributes to the literature on innovation policies governing the conditions for effective institutional changes.