Impact of IPR System on Patent Based Innovation in China: Empirical Studies over Chinese Patent Reform in 2000

Although there are three time amendments of Patent Law in China since 1985, empirical studies on impact over such changes have not been fully conducted. This study analyzes the differences of patenting movement before and after the patent reforms in China, and investigates the impact of Chinese patent reform in 2000 on local innovation activities with research window covering 30 provinces during 1993-2007. Major finding include that the patent reform in China not only stimulates directly local patent output, but also improves indirectly the innovation by strengthening the positive impact of innovation input on patent output and reducing the negative impact of foreign direct investment on patent output. The regions of more R&D intensive and technology accumulative advantage benefit more from the improvement of patent protection, which further implies that patent reform can raise R&D efficiency over those innovation intensive regions in China. On the other hand, less innovation intensive regions may need more focused policy assistant to encourage local innovation performance.