Roles of Intellectual Property in Developing Countries-Case Study of Patents Analysis in China

Patent area is one among the intellectual property right areas, China issued different and numerous patents during the eighteen years ago. China is a country which issued domestically and no locally the most number of patents but patents distribution in China is unequal in provinces, autonomous regions and municipalities’ cities of China. This study investigates the roles of issuing many numbers of patents in economic development of China. Gravity model and endogenous growth model are applied in analyzing data. With gravity model, we use the balanced panel data with fixed effects estimation in analyzing the roles of foreign patents in economic development of China. Those two panel data techniques are selected through Hausman test. With time series data set and endogenous growth model, through R-squared test, pooled OLS regression model or linear regression model is the best estimation in investigating the positive impacts of patents in provinces, cities and regions economic development; in studying the roles of foreign patent on economic the development of China (national level). This study uses STATA as its analysis tool. The patent protection is considered as a very important variable in economic development of China’s autonomous regions, municipalities and provinces since granted patent numbers define autonomous regions, municipalities and Provinces’ GDP with the perfect significant statistical possibility value of zero% and with increase of 7%. In China’s autonomous regions, municipalities and Provinces, the number of patent protections is the main intellectual property right protection and it is very important due to its positive influence on the expansion of China’s economy in autonomous regions, municipalities and Provinces.