Publication Type
Journal Article
Version
acceptedVersion
Publication Date
3-2017
Abstract
This study develops a novel conceptual framework to understand the differential impact of formal institutional regime shift in intellectual property rights on the innovation and patenting strategies of Chinese and Western firms operating in China. We argue that to the extent that Chinese firms have been deeply embedded in China’s informal institutions, they are less responsive to formal institutional changes than Western firms operating in China. Using the major China patent law reform of 2001 as an exogenous event, we find results consistent with our key arguments: With the strengthening of the previously weak (utility model) patent protection, Chinese firms are less likely to apply for such patents to safeguard their innovations than Western firms. However, this difference becomes less pronounced in regions with higher quality intellectual property rights and legal institutions that foster research and development and innovation, and when Western firms gain longer operational experience in China. This study advances our understanding of the intricate interaction between formal and informal institutions and specifically how “stickiness” may arise in their substitutive relationship because of the embeddedness of firms in informal institutional environments. It also provides important implications for policy and innovation strategies for policy makers and firms in emerging economies.
Keywords
intellectual property rights, innovation strategy, institutional change, emerging economy, China
Discipline
Asian Studies | International Business | Technology and Innovation
Research Areas
Strategy and Organisation
Publication
Organization Science
Volume
28
Issue
2
First Page
355
Last Page
377
ISSN
1047-7039
Identifier
10.1287/orsc.2017.1117
Publisher
INFORMS (Institute for Operations Research and Management Sciences)
Citation
HUANG, Kenneth Guang-Lih; GENG, Xuesong; and WANG, Heli.
Institutional regime shift in intellectual property rights and innovation strategies of firms in China. (2017). Organization Science. 28, (2), 355-377.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/5346
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1287/orsc.2017.1117
Included in
Asian Studies Commons, International Business Commons, Technology and Innovation Commons