Effects of Patent Policy on Outputs and Commercialization of Academic Patents in China: A Spatial Difference-in-Differences Analysis

The development of a difference-in-differences estimator is a new move in patent policy evaluation research. However, such an estimator neglects the possibility that academic patent activities follow a spatial autoregressive process with respect to the dependent variable. The objective of this study was to propose a spatial difference-in-differences estimator accounting for possible spatial spillover effects. In this study, an empirical analysis of a sample of 31 Chinese provinces from 2010 to 2019 indicates that an incentive patent policy has a positive impact on the output and commercialization of academic patents, with positive effects also spilling over into neighboring provinces. This study further found that incentive patent policies play a placebo role in academic patent activities. Provincial patent policies are merely a proxy for other variables that characterize the systemic differences between provinces that implement patent policies and those that do not. Therefore, the promotion of academic patent activities cannot be attributed to policy incentives.

Introduction

This introduction describes how the book examines the relationships between IP rights, organizational form, and market structure, using a combination of theoretical analysis and empirical evidence drawn from almost 120 years of U.S. patent policy and associated technology markets. This analysis deploys a “dynamic” approach to IP analysis, which anticipates that the effects of changes in IP protections differ depending on firms’ ability to adopt non-IP alternative mechanisms for capturing returns on innovation. In general, larger and more integrated firms will be able to do so at a significantly lower cost than smaller and less integrated firms. The entity-specific effects of IP rights imply that stronger and weaker IP regimes will impact the range of viable organizational forms for structuring the innovation and commercialization process, which in turn impacts the structure of innovation markets and the allocation of resources across different types of innovation projects.