The nexus of intellectual property rights and firm productivity in China: A nonlinear approach.

This paper explores the way that intellectual property rights (IPRs) protection as a moderator variable affects firm-level productivity gains through innovation (filing patents) and diffusion (importing goods). Applying the estimation method of conditional average treatment effect by Lee, Okui, and Whang (2017) to Chinese firm data, I show the graphic representation of the non-linearity that characterizes the heterogeneous average treatment effects of patenting and importing activities on firm productivity. The graphic results suggest that the productivity effect of patenting is positively influenced by local IPRs protection, while that of importing is initially negatively and subsequently positively affected by IPRs protection. I also find that overstrict protection of IPRs may diminish the productivity impact of both channels, and private-owned firms rely more on IPRs protection to enhance productivity through filing patents. [ABSTRACT FROM AUTHOR]