Abstract
Using patent data at the provincial level from 1985 to 2010, we find that the average quality of Chinese patents has declined; thus, the dramatic rise in the number of patents most likely has not produced a proportionate increase in the country’s total innovation capacity. In addition, we find evidence that the patent promotion policies (PPPs, namely preferential tax policies, subsidies, and subsidies for patent filing and maintenance fees) adopted by various government agencies in China can explain both the quantity increase and the quality fall in Chinese patents.
Cheryl Long is a Cheung Kong Scholar Professor of Economics with WISE and School of Economics at Xiamen University (China), and a research associate at Colgate University (U.S.)
Jun Wang is an assistant professor with the Intellectual Property Research Institute at Xiamen University
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Notes
- 1.
Foreign companies without a legal entity in China must use a Chinese patent agent to file patents in China.
- 2.
It should, however be noted that patent fee subsidies are likely to somewhat reduce average withdrawal rates; given that the application fees are paid for the patentee, they are less likely to withdraw a patent out of realization that it might not be “worth their money” to examine. This effect may have masked the underlying negative impact on patent quality of patent fee subsidies.
- 3.
Please also see Prud’homme (2012) for an alternative explanation related to the requirement of the HNTE tax scheme, where firms with a certain number of patents obtain the high-tech firm designation and the ensuing corporate income tax rebates.
- 4.
Adding R&D/capita S&T personnel/capita in the explanatory variables reduces our sample size but does not change the results.
- 5.
One should be careful with renewal fee subsidy policies, however, as they may artificially increase the renewal rate without enhancing patent quality.
- 6.
See also Prud’homme (2015).
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Acknowledgements
The authors appreciate the financial support from the National Natural Science Foundation (Grant No. 71273217) and the Fundamental Research Funds for the Central Universities (Grant No. 20720151001 and Grant No. 20720151287).
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Appendix I: Additional Results from Robustness Tests
Appendix I: Additional Results from Robustness Tests
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Long, C.X., Wang, J. (2016). Evaluating Patent Promotion Policies in China: Consequences for Patent Quantity and Quality. In: Prud’homme, D., Song, H. (eds) Economic Impacts of Intellectual Property-Conditioned Government Incentives. Springer, Singapore. https://doi.org/10.1007/978-981-10-1119-1_9
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