31-05-2013, 02:15 PM
Analysis of impact of different types of patents on technological advancement in China
ABSTRACT
This article examines the construction of a system of dynamic relationship between invention patent;
utility model patent; external design patent and technological advantages by using vector
autoregression (VAR) model. Through the application of Granger causality analysis, it has been found
that there exists a unilateral Granger causality between invention patent; utility model patent and
external design patent. This indicates that invention patent has the effect of promoting the growth of
other types of patents and that it is able to foster technological advances in China. Through analysis
using impulse response analysis and variance decomposition method, it is found that utility model
patent and external design patent are able to promote technological advancement, although, the
promotional effort of invention patent is not obvious.
INTRODUCTION
China has experienced rapid growth in the number of
patents granted since the promulgation of the Patent Act
in 1985. As at the end of 2010, there were a total of
7,037,574 applications for invention, utility model and
design patents, for which there were 6,000,460 local
applicants. Ju (2005) and Gao et al. (2005) examined the
relationship between the production of patents and
economic growth (mainly in the form of gross domestic
product) by applying time series dynamic equilibrium
relationship analysis method. They were of the opinion
that there was a long-term dynamic equilibrium relationship
between China’s patent production and economic
growth. However, they thought that there did not exist an
obvious causal relationship between patent production
and economic growth.
MATERIALS AND METHODS
The research methods adopted by this paper consist of VAR model;
Granger causality analysis; impulse response function and variance
decomposition analysis. VAR model is a model that is constructed
based on the statistical nature of data. In other words, the relationship
between the variables is not founded on economic theories;
instead, the lagged value of each internally-generated variable in
the system is used as a function to construct a model. Thus, singlevariable
auto regression model is expanded to a VAR made up of
multiple time series. Two things must be clear during the
construction of VAR model. The first concerns the question of which
variables are inter-related. For the paper, invention patent; utility
model patent and technological advancement indicator are used as
internally-generated variable for the construction of VAR model. The
second question concerns the determination of lag intervals, which
is also the key to construction of VAR model. On the one hand, lag
interval should be sufficiently large in order to able to completely
reflect the dynamic features of the model constructed. On the other
hand, the greater the lag interval, a greater number of parameters
that require estimation would be needed. As such, the model would
have reduced level of freedom. Therefore, there is a need to take
into general consideration of the number of lag intervals.
Conclusion
The following conclusions are obtained through cointegration
test and Granger causality test on series
variable invention patents, utility model patents, design
patents and technological advancement, and analysis by
way of impulse response function and variance
decomposition techniques on VAR model:
1. There exists a unilateral Granger causal relationship
between invention patent and both utility model patent
and design patent. This indicates that invention patent,
being one with the highest level of innovation, has the
effect of fostering the growth of other types of patents.
Furthermore, patent disclosure is an excellent way of
promoting technological propagation in China.