The use of intellectual property right bundles and firm performance in China

Abstract

Intellectual property rights (IPRs) have become increasingly important for firms in today’s knowledge-based economy, as evidenced by the strong growth in their use. The vital role of IPRs has motivated research into their association with firm performance. However, few firm-level studies have been conducted in developing countries. Moreover, empirical studies on the use of IPR bundles and their economic performance are scarce. To fill this gap, this study first illuminates how the joint use of different IPRs varies with firm characteristics, second, it analyses the association of such joint use with firm performance, based on a constructed large dataset that merges firm-level information from China’s Annual Survey of Industrial Enterprises with data on IPR filings from the China National Intellectual Property Administration. Results indicate that the joint use of different IPRs is strongly correlated with the industrial sector and firm size. Firms that use IPR bundles also have much greater economic performance than those that rely only on single types, indicating the existing complementarity between these rights. This study advances the understanding of the relationship between IPRs and firm performance and emphasises the complementary effect between different types of IPRs, demonstrating the significance of utilising various intellectual property mechanisms fully to increase firms’ competitive advantages.