Lily H. Fang, Josh Lerner, Chaopeng Wu
Using a difference-in-differences approach, we study how intellectual property right (IPR) protection affects innovation in China in the years around the privatizations of state-owned enterprises (SOEs). Innovation increases after SOE privatizations, and this increase is larger in cities with strong IPR protection. Our results support theoretical arguments that IPR protection strengthens firms' incentives to innovate and that private sector firms are more sensitive to IPR protection than SOEs. © The Author 2017.
INSEAD, 1 Ayer Rajah Avenue, Singapore, 138676, Singapore; Harvard University, NBER, Rock Center for Entrepreneurship, Room 314 Harvard Business School, Boston, 02163, MA, United States; XiaMen University, School of Management, XiaMen, Fujian Province, 361005, China
