The Analysis Of The Impact Of The Scale Of The Potential Market On The Patent Output Of Large And Medium-sized Industrial Enterprises

Patent applications or authorization status often represent a region’s innovationability and technical strength, so it has caused widespread concerns. Patent can beassociated with many disciplines, while the two main disciplines are economics and law.There are also two ways researching patent in economics. Theoretical economics focuson patent length, patent width, patent strength, the structure of patent applications andpatent strategy of the country or region. This direction consist of economic welfareanalysis and the corresponding policy recommendations on an appropriate patent system,in order to promote a country’s technological progress and improve economic efficiency;The other direction study the impact of the volume of patent applications or grantedpatents on production efficiency of the total economy and regional economic growth; orstudy the impact of R&D investment and labor input on patent output. At the same time,some researchers find that there are many problems in the development of patent, such asthe small number of patent output. The number of patents per capita lags far behindEurope and the United States and other countries.This paper studied that problem under the assumption of the closed marketenvironment, found that this situation was caused by inefficient state system design,unreasonable enterprise management and low level of people’s attention. Many otherreasons account to this problem, but this paper focus on the question: whether the scaleof the potential market impact the patent output of large and medium-sized Industrialenterprises? There are two points of view on this issue. One view is that firms tend toconcentrate its resources on developing the potential market so as to obtain greaterprofits and don’t pay attention to technology research and development; One view is thatthe larger size of the market on behalf of a greater market share, which encourage firmsput more money to technological innovation.Despite the different theoretical conclusions, the literature is not derived from anempirical point of view of relevant conclusions. This paper attempts to examine theproblem from an empirical point of view, and build two models: a time series modelbased on the national level, as well as a panel data model based on the provincial level.By the two model, the paper draw the impact of the size of the potential market volume on patent outputs. The main conclusion is that companies facing a larger potential marketare more willing to take the strategic choice to expand the market, while ignoring thedevelopment of the patent. Companies which have acquired great profitability have theimpetus to promote the improvement of enterprise technological progress.