Economic growth target and patent quality: the heterogeneous effects of knowledge stock

ABSTRACT

Using the Chinese industrial enterprise database and enterprise patent database, we investigate the influence of economic growth targets on patent quality, gauged via the knowledge breadth approach. Our findings reveal: (i) Economic growth targets significantly diminish patent quality, a conclusion that remains robust through multiple sensitivity analyses. (ii) Several underlying mechanisms drive this impact, including reduced allocations for education and science, as well as amplified market segmentation. (iii) The effect demonstrates heterogeneity based on knowledge stock, represented by firm age and export activities. Notably, for firms with substantial knowledge stock, the negative impact on patent quality becomes less pronounced. Our research sheds light on the nuanced ramifications of performance target management and elucidates key determinants of patent quality.

KEYWORDS:

• Economic growth target
• Patent quality
• Knowledge stock
• Promotion tournament

Acknowledgements

We are grateful for the input from the editor and anonymous reviewers that led to material improvements in the paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Hu Shan

Hu Shan is a Ph.D. candidate now majoring in industrial economics at the Zhongnan University of Economics and Law and has received the subjects of corporate theory, industrial organization theory and regional economics. For the recent 5 years, He has focused on the scholarship on the technology progress, industrial policy and governmental behaviors. Hu has authored three technical economic papers on market segmentation, total factor productivity and corporate innovation in Chinese journal.

Wu Lang

Wu Lang is presently pursuing her Ph.D. in Industrial Economics at the School of Business Administration, Zhongnan University of Economics and Law, China. Her scholarly pursuits are focused on government performance target management, corporate innovation, and industrial policy. Her contributions to academia include the published paper “The impact of the free trade zones construction on green technological innovation—evidence from 288 cities in China” in the journal Heliyon.

Liu Ruilei

Liu Ruilei is currently working toward the Ph.D. degree in School of Economics, Xiamen University, Xiamen, China. Her research interests include government performance target management, technological innovation, and industrial policy.