A study on China's R&D innovation: From the perspective of patent economic value and green patents

The connection between world economic development and technological innovation is getting closer and closer, and enterprises, as the main body of technological innovation, play an essential role in it. This thesis takes China, an emerging economy, as the background to conduct an in-depth exploration and discussion of the factors influencing the R&D innovation of its listed companies. More specifically, we focus on patents produced by R&D innovation, taking the economic value of patents as the primary research goal, and also on the green patents obtained by enterprises. This thesis mainly conducts an in-depth exploration of three different research questions. First, given that the calculation of the economic value of patents is based on the reaction of the stock market, and stock liquidity is an essential characteristic of stocks, its impact on the economic value of patents is still unknown. We use the data of China's A-share listed companies between 2000 and 2020 as a sample to study the impact of stock liquidity on the economic value of corporate patents. This thesis finds that stock liquidity can significantly increase the economic value and innovation returns of patents obtained by companies. This conclusion is still robust after passing the test of instrumental variables and quasi-natural experiments. Furthermore, we found that companies in high-tech industries are the leading promoters of the positive relationship between the two, and this relationship is not significant in other industries. We also found that increased stock liquidity can increase stock transparency, reduce information asymmetry, improve market operation and pricing efficiency, and enable patents to be accurately priced, thereby increasing the economic value of patents and innovation returns. In addition, we also used six other alternative measures of stock liquidity for testing, and the results were similar. Secondly, China's patent types are divided into invention patents, utility models and design patents (non-invention patents). The latter's proportion in the total number of patents is always significantly higher than the former. However, there is always a need for empirical conclusions on the value between them. This thesis conducts a quantitative comparison and analysis. We found that the individual economic value of invention patents is significantly higher than non-invention patents. However, the higher the proportion of the latter, the higher the company's total patent economic value and innovation returns. In addition, compared with state-owned enterprises, private enterprises have more invention patents, a more significant number and proportion of R&D staff, and a lower proportion of non-invention patents. The high-tech industry has more invention and non-invention patents and R&D staff, but the proportion of non-invention patents is significantly lower than that of other industries. Moreover, government innovation subsidies and increased R&D employees can significantly suppress the proportion of non-invention patents held by enterprises. If the market operates more efficiently, the higher the proportion of utility models and designs, the higher the average economic value of patents owned by the company, and the total economic value of patents and the return on innovation will be significantly lower. That is similar to when market competition is more intense or when a company's competitive position is higher. Finally, given the increasingly severe global environmental problems such as global warming and the gradual gaining popularity of the concept of green development, we explored the factors that affect corporate green innovation. This thesis takes institutional investors, essential players in the market, as the research object and finds that general institutional investors cannot promote green innovation in enterprises. In contrast, a particular group of institutional investors, green institutional investors, can significantly promote green innovation in enterprises. Furthermore, we found that green institutional investors can play a more significant role in promoting green innovation in companies with high green cost expenditures and private companies. The positive relationship between the two is insignificant among low green cost expenditures and enterprises and state-owned enterprises. In addition, this thesis finds that companies with the participation of green institutional investors tend to disclose environmental information actively, and these companies also have relatively higher ESG ratings. Establishing a corporate reputation attracts more investors inclined to make green investments, promoting corporate green innovation.