Innovation policy and firm patent value: evidence from China

• Main Authors: Aiting Xu, Caijuan Cheng, Keyang Qiu, Xiaoxu Wang, Yuhan Zhu
• Format: Article
• Language: English
• Published: Taylor & Francis Group 2021-08-01
• Series: Ekonomska Istraživanja
• Subjects: innovation policy; patent value; comprehensive patent valuation model; quasi-difference in differences model; innovation correlation network
• Online Access: http://dx.doi.org/10.1080/1331677X.2021.1970607
• ISSN: 1331-677X; 1848-9664

This study aims to contribute to the empirical literature that evaluates the impact of the Science & Technology (S&T) Outline, a Chinese innovation policy implemented in 2006, measured by the scale of patent value. We first create a comprehensive patent valuation model (CPVM), derived from the extended patent renewal model and a variety of feature indices, to measure a firm’s patent value. From a database with over 700,000 Chinese patents from 1985 to 2013, we find that the patent value increases after the release of the S&T Outline, and the scale of patent value after 2006 is about 26.52 times more than that before 2006. Further, we use a quasi-difference in differences (DID) model to estimate the growth effect caused by the innovation policy. The results indicate that the S&T Outline had a significant effect on the promotion of patent value, in industries with high patent intensity. Considering the lag effect of the S&T Outline, we construct innovation correlation networks to visualise and compare its promotion effect. We find that regional networks have a gathering tendency after policy implementation, while industrial networks have a decentralising tendency.