Does offensive patent insurance promote corporate innovation? Evidence from a quasi-experiment

This article empirically investigates the impact of offensive patent insurance on corporate innovation based on China's patent insurance policy. We find that offensive patent insurance promotes corporate innovation. The result is robust to a battery of sensitivity tests and is more prominent for firms located in regions with more efficiency in handling patent infringement cases, for small enterprises, for firms located in regions with better implementation of the insurance policy, and for firms with less complex technologies. In addition, we observe that offensive patent insurance promotes corporate innovation by stimulating corporate Research and Development (R&D) investment. Furthermore, we find that offensive patent insurance promotes radical innovation and incremental innovation and has an insignificant negative effect on appearance innovation, suggesting that offensive patent insurance leads enterprises to invest more resources in the development of innovations with higher market value. Our study suggests that offensive patent insurance is an important tool to promote corporate innovation.