| Abstract: |
China has surpassed the United States in patent applications and has become
world leader. Strong patenting activity, however, did not lead to strong
productivity growth. The delinking of patenting activity from productivity
growth could be explained by quality and relevance issues. Although the number
of patents has been soaring, few are genuine inventions. Relatively low
utilisation rates of patents point to a low degree of relevance. This paper
uses a representative survey of Chinese patenting firms to provide a detailed
picture of the patenting landscape along the dimensions of geographical areas,
detailed industrial sectors, traditional and modern industries as defined by
the Chinese government, firm age, size and ownership. It also overviews
government subsidies across firms. Transport equipment makers hold most
patents per firm, followed by electronics manufacturers. State-owned firms
spend more on R&D per patent, but hold fewer patents per researcher than
private or foreign-invested firms. High patenting performance and government
support are not necessarily linked to high utilisation of patents. Smaller,
younger and private firms expect a higher return on their patents and so do
exterior design patent holders. Furthermore, the paper examines what drives
patenting activity. Higher R&D spending by the firm and higher share of
researchers in its workforce tend to be associated with higher patents per
employee. Smaller and older firms tend to patent more, and government support
also appears to matter. Exterior design patents are associated with different
firm characteristics: R&D intensity is lower and government support matters
less. Most firms consider IPR protection insufficient and the share of firms
having experienced patent infringement is the greatest among the largest
firms. Many of them do not do anything once their rights are infringed as they
do not expect effective remedy. Instead of patenting, which may not provide
sufficient protection from imitators, they adopt other strategies like reaping
the first mover advantage to market their goods or sign confidentiality
agreements with their staff or contracts on commercial secrets. This Working
Paper relates to the 2019 Economic Survey of China (http://www.oecd.org/economy/china-econo
mic-snapshot/). |