Patenting and the role of technology markets in regional innovation in China: An empirical analysis

In this paper we empirically explore the connections among regional patenting behaviour, technology markets and the number of technology firms across 30 regions of Mainland China. We utilize Chinese data on the number of technology firms as a final dependent variable to reflect regional technological business activity in China. Examining prior patents granted and technology market contracting by region we find that technology markets appear to play a mediator role in the relationship between patents and technological business activities across regions in the form of number of technology firms. The results imply that technology markets are a useful linkage in the relationship between patents and technological business activity across regions by allocating patented technologies from the region in which they were created to the region in which they are used. This is timely given the nascent understanding of technology markets in China and the country's drive towards promoting indigenous innovation.