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.
Introduction
Nowadays, firms are increasingly engaged in multiple innovative activities and could thereby rely on multiple types of intellectual property rights (IPRs) because innovation and commercialisation are becoming more complex and competitive. In fact, while the innovation process in today’s world often has multiple layers and includes several individual inventions embedded in a single product, it previously had only one layer (Graham, 2008). It is clear that different types of IPRs can be used complementarily to benefit firms that are shifting the focus from a single invention to a complex product or a dynamic innovation process (Somaya and Graham, 2006; Graham, 2008). Different IPRs are designed to protect different innovation facets and address distinct market needs (Comino et al., 2015); thus, the joint use of various IPRs throughout innovation and commercialisation processes could provide better protection and offer more opportunities to reap returns from new technologies and products (Graham, 2008). As the European Union Intellectual Property Office (EUIPO, 2020) pointed out, ‘it is not surprising that IPR bundles are suitable for innovation, as it is a process where novelty and marketing are mixed, mapping the different IPR purposes and scope’. Read more