Technology Protectionism and the Patent System: Evidence from China

Governments have strong incentives to allow their inventors free ride on foreign technologies. They can achieve this result by discriminating against foreigners in the patent system—by refusing grant a for inventions. International law treaties forbid practice, which may lower global innovation and hurt international trade. Using data half million inventions submitted Chinese office, we find robust evidence of anti-foreign bias issuance patents ‘strategic’ technology areas. Foreigners are about fifty per cent more likely be refused strategic than locals.