Research On Patent Applications By Multinational Corporations In China Towards Our Technology Spillover Effects

With the globalization of economy,a country's technological progress is not only affected by the domestic technological innovation but also by the international factors. This effect is particularly evident in developing countries and regions whose technological innovation capacity is weak. With the system of the protection of intellectual property rights becoming more and more complete in developing countries and regions, the patent applications of developed countries in them have been significantly improved at the quantity and quality. This provides developing countries and regions with potential favorable conditions for the improvement of technological innovation capacity and the formation of innovative mechanisms, developing countries can take full advantage of the technology spillover effects of foreign patent applications to narrow the technology gap with developed countries. As important path of international technology diffusion, whether foreign patent application has had significant technology spillover effects on the developing countries and how to make use of it to boost technological advance have been paid attention by scholars both at home and abroad.Using panel data of 27 provinces from 1985 to 2006, this paper studies the impact of foreign patent applications in China on domestic total factor productivity. Empirical results show that: patent applications in China by multinational companies do not have a direct role on China's technological progress, but indirectly promote technological progress by technology diffusion to other domestic firms. Overall, the Positive direct effect of the patent application in China by multinational corporations is offset by the negative direct effect, and foreign patent applications did not boost the total factor productivity of our country on the whole. On the district level, the eastern region got larger indirect spillover effects of capital stock of foreign R&D because of its economic and geographical advantages, but suffered greater direct technical squeeze by foreign companies because of the intellectual property protection. In addition, the combined technological progress effect of the R&D capital stock spilled by foreign patent applications on the eastern, central and western regions are all negative. The results demonstrate that the indirect technology spill effect of the patent applications of multinational corporations in China has positive significance on the improvement of our technological level; however, our domestic R&D investment is still the main "source"of China's technological progress at present.