The Effects Of IPR Protection On Innovation

Based on the provincial panel data from 31 provinces autonomous regions and municipalities in China from 2000 to 2014,we build the China's provincial intellectual property right(IPR)protection index.Then we analyze the overall effects of intellectual property protection on innovation in China using the invention patent grant quantity as a proxy variable for innovation.The results show that intellectual property protection has a significant role in promoting the overall level of innovation.Furthermore,we find that the innovation and the protection of intellectual property presented a U-shaped non-linear relationship.That is to say,when the level of intellectual property protection is low,strengthening intellectual property protection will inhibit the development of innovation to a certain extent;when the level of intellectual property protection exceeds the critical value,strengthening intellectual property protection has significant role in promoting innovation.Considering the uneven development of regional economy in China that the development of eastern area is clearly better than the mid and western areas,and the middle region is better than the western region,this paper analyzes the impact of intellectual property protection on the innovation in the three different areas.The results show that intellectual property protection can promote the improvement of innovation in eastern and middle areas,but the effect in the eastern area is significantly higher than that in the middle area in term of magnitude,and it has a certain degree of inhibition on the innovation in the western region.Therefore,this result further validates the nonlinear relationship between intellectual property protection and innovation.In addition,given the two-way relationship between variables and innovation and the omission of variables,there may be endogenous issues in this paper.Therefore,this paper adopts the GMM estimation method to regress and test the model,the conclusion of this paper is still robust.At the same time,due to the time factor of application authorization of the invention patent,the data of invention patent maybe inaccuracy.So,this paper dropped the data of the last three years before regression and the conclusion of this paper is still significant.This paper also finds that increasing investment in R&D,especially in human capital,increasing the degree of openness and marketization of the region,improving regional financial environmental and increasing infrastructure construction all have a significant positive effect on the level of innovation.Besides,this paper finds that foreign direct investment does not promote the improvement of China's innovation,but has a certain degree of inhibition.This may be mainly due to the factors that high technical barriers,investment in the lower labor-intensive industries.In addition,the development of colleges and universities and the market structure do not have a significant impact on innovation.