IPR Protection, Innovation And Industrial Agglomeration

Intellectual property right (IPR) protection is the most important institutional arrangements of stimulating innovation and promoting industrial agglomeration. However, there are rare reports that simultaneously consider IPR protection, industrial agglomeration and innovation in one analysis framework. Nowadays Chinese economic has transformed into a more advanced stage, so the research that how the companies accelerate innovation and regional industrial agglomeration driven by IPR protection from the characteristics of their own development and continue to maintain strong momentum of development has been a very critical issue undoubtedly. Therefore, there has important theoretical value and practical significance to research on IPR protection, innovation and industrial agglomeration, combining with the actual situation in China.Based on the IPR protection perspective, this paper makes theoretical analysis, measurement and empirical study of the influence of intellectual property rights protection on technological innovation and industrial agglomeration.In theoretical analysis based on Branstetter et al.(2007), Grossman and Helpman (1991) model, it introduces the factors of enterprise migration and local innovators to illustrate the relationship among IPR protection, innovation and industrial agglomeration. The study has shown that, on the one hand, where the level of IPR protection are low, strengthening IPR protection will make more enterprises gather in local district for production, which leads to higher local wage and formation of industrial agglomeration. On the other hand, IPR protection can’t stimulate innovation unless the level of IPR protection exceeds a certain threshold.In theoretical analysis, this paper first constructs a index system measure the intensity of intellectual IPR protection, then the relations among IPR protection, innovation and industrial agglomeration are investigated on experimental level, followed by the use of panel data of30provinces in2001-2012. The regression results show that after controlling for other variables, there is a positive relationship between IPR protection, and industrial agglomeration, which means that IPR protection can affect spatial distribution of the companies. And only in the eastern region where the level of IPR protection are higher than the middle and west region, innovation can be promoted. Our analysis of IPR protection, innovation and industrial agglomeration provides an empirical support based on China. Combined with theoretical analysis and empirical research, this paper proposes the following recommendations for policy:the level of IPR protection should be fit for the national conditions; establish regional technology innovation system led by innovation of industrial agglomeration; expand the market effect of industrial agglomeration and establish the regional industrial brand; improve human capital and knowledge capital stock, strengthen the people’s awareness of IPR protection.