سیستم های بانکداری، نوآوری، حمایت از مالکیت معنوی، و بازارهای مالی: شواهدی از چین

One unique feature of the emerging economies in Asia is the rich variation in the development of financial systems and technological sectors across different geographical areas. This unbalanced evolution provides us a potentially more powerful setting to investigate the dynamics among banking systems, innovations, intellectual property (IP) protections, and stock market reactions that are especially useful in understanding the policy–finance–innovation nexus in emerging economies. Using newly available data from China, this study confirms the nurturing role of financial systems on innovations, the value-enhancing function of firms' innovative activities, and the lead–lag predictive role of innovations on stock returns, in the context of emerging economies. More importantly, the study documents that stronger provincial IP protections reduce patent piracy and hence enhance local firms' market values.

As one of the major emerging economies, China has experienced remarkable development in both financial and technological sectors during the last three decades. While this progress is significant at the country level, the impact across different geographical regions is nevertheless uneven. This unbalanced evolution naturally creates rich variations across different provinces, in terms of financial and technological characteristics. Such variations, which are a somewhat unique feature in emerging economies, provide us with a potentially more powerful setting to investigate the relations among banking systems, innovations, intellectual property protections, and stock market reactions that are especially useful in understanding the perspectives of emerging economies. This study analyzes the policy–finance–innovation nexus in the context of China by analyzing a unique province-level and firm-level dataset. On the nurturing roles of banking systems on innovations, this paper documents that one standard deviation increase in the local credit market index which boosts local patent output by at least 14%. On the market's valuation of intangible assets associated with innovation, this study demonstrates that firm-level patent capital and province-level intellectual property (IP) protections which strongly and positively explain public firms' market values. One standard deviation change in patent capital and IP protections moves the market value by at least 1.2% and 1.5%, respectively. On the lead–lag predictive role of innovations on stock returns, one standard deviation increment in a firm's patent flow increases its future stock returns by 0.05%–0.10% per month. In summary, this study's first contribution to the literature is to confirm the important role of financial systems and legal environments in promoting innovation, the value-enhancing function of firms' innovative activities and IP protections, and the lead–lag predictive role of innovations on stock returns, in the context of emerging economies. Although these important relations have been reported in prior studies using the data of developed countries, no studies systematically investigated whether similar results would hold for emerging economies. The authors would like to point out that it is not given that empirical regularities documented in developed countries would automatically prevail in emerging economies, due to different institutional environments. The major contribution of this research is to document the effect of provincial IP protections on public firms' market values. This finding is important because unlike developed countries, emerging economies have enormous degrees of asymmetric development across various geographical regions. Past studies using data from developed countries focused on industrial IP protections. To the best of our knowledge, this study is the first to find that stronger provincial IP protections enhance local firms' market values.

The authors believe that the findings in this study uniquely benefit Asian business through their valuable policy implications. One unique feature that distinguishes most of the Asian countries from the Western developed countries is that the former usually have enormous degrees of unbalanced economic growth across various geographic regions. This huge inequality is social-welfare suboptimal and creates many problems. This research, by documenting the real effects of regional financial market development and the roles of regional intellectual property protection, provides a remedy to the problem of inequality. Specifically, one policy implication for government is the need to reform poorly regulated financial industries that were part of the problem (for instance, one drawback of China's financial system is that the Big Four state-owned banks systematically discriminate against smaller enterprises and favor bigger and more established companies) and to encourage financing of promising entrepreneurs and ventures, especially in the less developed regions, without charging them inappropriate rents. Another policy implication is that government, both central and regional, should do whatever is in their power to protect intellectual properties and punish piracy. This will effectively motivate firms to invest in innovation and encourage financial market participants to appreciate intellectual property.