R&D Investment and Patent Application: The Effects of Internationalization and Ownership

Abstract

The purpose of this paper is to assess whether research and development (R&D) investment, degree of internationalization (DOI), and ownership structure affect the patent application of enterprises in an emerging market. Using a firm-level data from 242 China's information and communication technology (ICT) and automobile manufacturing listed companies on Shanghai and Shenzhen A- stock exchanges market from 2011 to 2015, our empirical results demonstrate that: (1) the degree of internationalization of enterprises has a positive facilitating influence on the correlation among corporate R&D investment and a patent application; (2) the state-owned ownership negatively moderates the R&D investment-patent application link, and (3) international expansion can adequately compensate for the efficiency disadvantages of R&D investment and patent application engender by state ownership. Besides, the study discovered and explained an exciting phenomenon and bring forth important enlightenment to enterprises in the emerging economies to improve resource utilization efficiency and achieve technical ability to catch up.