Control Factors of Intellectual Property in Developing Countries-Case Study of Patent Analysis in China

The right on intellectual property is among crucial public policies and a key factor of both technology and Science in World. The intellectual property right plays a crucial role in technology transmission and development inside and outside of countries. China is a country which issued domestically and no locally the most number of patents. Patents distribution in China is unequal in provinces, autonomous regions and municipalities’ cities of China. This article investigates the causes of that inequality of patents distributions in China’s economy. The main purpose of this research is to demonstrate the determinants of having highest number patents in economy. Gravity model and endogenous growth model are applied in analyzing data. With gravity model, we use the balanced panel data with random effects model estimation in studying the influencing factors of more foreign patent numbers in China’s economy. 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. STATA is used as analysis tool. Among main factors which influence the attraction of the diverse investors or both policy makers and business people to come in China, there are Gross Domestic Products of China through the increase of 75%, similar Patent applicants’ Gross Domestic Products influence granted patents number with 28% of enlarge. The third factor controls innovation in China is export flow values to granted patent holders with the increase of 18%.