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

Fang, Lily H.; Lerner, Josh; Wu, Chaopeng

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

NBER Working Paper No. w22685

49 Pages Posted: 3 Oct 2016 Last revised: 27 Dec 2025

See all articles by Lily H. Fang

Harvard Business School - Finance Unit; Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Private Capital Research Institute

Chaopeng Wu

Xiamen University - School of Management

There are 3 versions of this paper

Date Written: September 2016

Abstract

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.

Suggested Citation: Suggested Citation

Fang, Lily H. and Lerner, Josh and Wu, Chaopeng, Intellectual Property Rights Protection, Ownership, and Innovation: Evidence from China (September 2016). NBER Working Paper No. w22685, Available at SSRN: https://ssrn.com/abstract=2846901