Do Intellectual Property Rights Affect Firm-level Productivity Growth in China? A Nonlinear Approach

Abstract

This paper explores the way that intellectual property rights (IPRs) protection as a moderating variable affects firm-level productivity growth through innovation (filing patents) and diffusion (importing goods). Using Chinese firm data, I show graphic representation of the non-linearities that characterize the heterogeneous average treatment effects of both patenting and importing activities on firm productivity. The graphic results suggest that productivity effect of patenting is positively dependent on the local protection of IPRs, while that of importing is first negatively and then positively affected by IPRs. I also find that overstrict protection of IPRs can reduce the productivity impact of both channels and firms in private sector are more reliant on IPRs to improve productivity
through filing patents.

Keywords: Intellectual property rights, firm productivity, firm ownership, non-linearities, conditional average treatment effect

JEL Classification: F43, O31, O34, O43, P26