Does intellectual property protection promote green innovation in firms? A perspective on R&D spillovers and financing constraints

Abstract

Although the literature has assessed the impact of Intellectual property protection on urban innovation, there is still a gap in the assessment of the impact of green innovation at the firm level. This study constructs a multi-period differences-in-differences (DID) model using China’s Intellectual Property Demonstration Cities (IPDC) as a quasi-natural experiment to investigate the impact of IPDC on corporate green innovation. The findings indicate that (1) the IPDC program significantly stimulates corporate green innovation and has long-term effects. This finding still holds after using PSM-DID as well as robust IW estimators. (2) Mechanism analysis suggests that IPDC can promote firms’ green innovation by reducing R&D spillover losses and alleviating financing constraints. (3) Heterogeneity tests show that the IPDC program has a more significant promotion effect on small, state-owned, growth-stage firms. Based on the above findings, this study provides policy implications for enhancing intellectual property protection to stimulate corporate green innovation.

Comprehensive intellectual property ability and firm productivity: A quasi-natural experiment based on national intellectual property demonstration advantage firm policy in China

“…Intellectual property protection stimulates knowledge sharing and innovation output [8][9][10], promotes technology progress and productivity improvement in firms [11]. Simultaneously, intellectual property protection will also reduce knowledge spillovers [12][13][14], strengthen the technological and market monopoly position of firms, and reduce productivity. Therefore, empirical research has found inconsistent conclusions.…”