1. c 1 November 13, 2009 Show-Ling Jang Professor of Economics, National Taiwan University

2. Outline Introduction 2 The trend of patent production in China 3 Data source and procedure 4 Characteristics of the coinventorship structure 5 The determinants of joint invention of countries 6 Conclusion 7 2 Abstract 1

3. 3  This study examines inventor data by country of residence, and by analyzing main collaborating countries with China in global technology production during 1997-2007, we demonstrate the evolving trend of an emerging market in the collaborative patenting network.  In addition to exploring the pattern of cross- border joint inventions, by linking patent data and other macro-economic factors, we model the propensity of China and other countries in engaging co-inventing activities. We find that China currently plays a supporting role in the international coinventorship.

4. Introduction 4 First Stage Second Stage We first provide a typology on the collaborative inventing network at country level, taking China as our focal country. Co- invention happens when joint invention between at least one inventor from China and at least one inventor from other country. Based on the indicators derived from the first exploratory stage of our analysis, we further investigate what determine the likelihood of joint invention between China and foreign co- inventors. The objective of this study is two-fold. We use patent data granted at the United States Patent and Trademark Office (hereafter USPTO) to examine the pattern of coinventorship in China over the period 1997-2007.

5. The trend of patent production in China USPTO patent grants 1986-2007 -The number of patent applications per billion yuan of real R&D expenditure nearly doubled -The number of patent grants has more than tripled In terms of sheer quantity, the patent production in China has recently gaining momentum in absolute count and the patenting propensity has similarly increased. USPTO patent applicationsDomestic patent activities China’s patent application to USPTO -Increases ten times within the two recent decades, and is most conspicuous from 1997 China’s patents granted by USPTO -In year 2002 amount to 289, ranked 21 worldwide -The number increase to 1225, ranked 12 worldwide in year 2008 5 Comparing to the BRIC countries 1963-2008 the total counts of BRIC’s utility patent grants by USPTO BRAZIL: 2094 RUSSIA: 2409 INDIA: 4080 CHINA: 5162

6. The trend of patent production in China (cont’d) Figure 1 Trend of patent production in China 6

7. Data source and procedure 7 Data source In this study, we used the USTPO database to examine the pattern of inventive collaborations between China and other countries. Utility patents, patents for invention, are chosen. Because utility patents have been considered as indicative of technological output. Because there are only limited numbers of patent production in the earlier decades, we choose to cover period from 1997, when we begin to witness a patent boom, to 2007. Database Patent type Period We included in our sample all patents involving Chinese inventors as long as one or more of the inventors were located in China. Since 1997, Hong Kong has been considered as the special administrated region of China. We distinguished patents with Hong Kong origin from the analysis due to its marked differences in economic development. Since 1997, Hong Kong has been considered as the special administrated region of China. We distinguished patents with Hong Kong origin from the analysis due to its marked differences in economic development.

8. Data source and procedure (cont’d) We included in our sample all patents involving Chinese inventors as long as one or more of the inventors were located in China. Total of 5374 China’s utility patents granted by USPTO during 1997-2007 Procedure 2. Technological field analysis We focus on the main collaborating countries that conduct co- inventing activities with China We further examine the ownership of these co-inventions. 1. Country pair approach 3. The ownership of these co- inventions We also code the technological field of such co-invention based on Hall’s taxonomy (Hall, 2001).

9. Characteristics of the coinventorship structure Our patent dataset enables us to examine the various aspects of the co-inventing activities, such as: propensity team size and its composition geographical distribution of partners technological directions the evolving role of China Co-inventingactivitiesCo-inventingactivities 9

10. Question 1 Question 2 Question 3 Question 4 To what extent have co-invented patents accounted for China’s total patent production share? Who partners with China to jointly invent? Under what type of technological fields does joint invention occur? How the authorship and ownership of China’s co-invented patents reveal the collaboration nature? Characteristics of the coinventorship structure (cont’d) 10

11. Characteristics of the coinventorship structure (cont’d) 11 Figure 2 China's co-invented patent count and its patent share by year

12. Question 1 Question 2 Question 3 Question 4 To what extent have co-invented patents accounted for China’s total patent production share? Who partners with China to jointly invent? Under what type of technological fields does joint invention occur? How the authorship and ownership of China’s co-invented patents reveal the collaboration nature? Characteristics of the coinventorship structure (cont’d) 12

13. Table 1 China's co-invented patents by country pair (part) 13 Number of co-invented patent by co-inventor's country Number of co-invented patent by co-inventor's country pair Top three assignee's country Co-invented country Patent count PairPatent share Share of assigneed patent 123 USA (US) 862 (52.24%) US/CN44.42%40.36%US(607)CN(12)TW(11) US/CN/HK1.21%1.09%US(15)HK(2)VG(1) US/CN/TW0.61% US(5)TW(3)CN/US/TW(2) US/CN/GB0.55% US(8)GB(1) US/CN/SG0.55%0.48%US(5)SG(3) US/CN/FR0.48% US(8) US/CN/JP0.42% US(4)JP(1)CN(1) US/CN/CA0.36%0.30%US(4)BM(1) US/CN/DE0.36%0.30%US(2)DE(2)US/DE(1) US/CN/DE/JP0.30% DE(5) US/CN/GB/BE0.30% US(5) US/CN/KR0.30% US(4)KR(1) Other pairs2.36%2.30% Taiwan (TW) 524 (31.76%) TW/CN30.97%30.91%TW(380)CN/TW(110)CN/VG(11) TW/CN/US0.61% US(5)TW(3)CN/US/TW(2) Other pairs0.18%

14. Characteristics of the coinventorship structure (cont’d) 14 Figure 3 Coinventing propensity by foreign collaborators Singapore has the highest proportional share of co-invented patents with China to its total patent counts, averaging at 1.67%, followed by Taiwan with an average of 0.82%

15. Question 1 Question 2 Question 3 Question 4 To what extent have co-invented patents accounted for China’s total patent production share? Who partners with China to jointly invent? Under what type of technological fields does joint invention occur? How the authorship and ownership of China’s co-invented patents reveal the collaboration nature? Characteristics of the coinventorship structure (cont’d) 15

16. Characteristics of the coinventorship structure (cont’d) 16 Figure 4 Co-invented patent count by technological categories Based on NBER technological classification scheme proposed by Hall (2001): class 1 : Chemical class 2 : Computers & Communications class 3 : Drugs & Medical class 4 : Electrical & Electronic class 5 : Mechanical class 6 : Others Based on NBER technological classification scheme proposed by Hall (2001): class 1 : Chemical class 2 : Computers & Communications class 3 : Drugs & Medical class 4 : Electrical & Electronic class 5 : Mechanical class 6 : Others

17. Question 1 Question 2 Question 3 Question 4 To what extent have co-invented patents accounted for China’s total patent production share? Who partners with China to jointly invent? Under what type of technological fields does joint invention occur? How the authorship and ownership of China’s co-invented patents reveal the collaboration nature? Characteristics of the coinventorship structure (cont’d) 17

18. Characteristics of the coinventorship structure (cont’d) 19971998199920002001200220032004200520062007Avg Avg inventor count per CIP 3.583.893.543.553.363.323.633.463.733.964.623.91 Avg CN inventor count per CIP 1.281.111.201.421.281.181.291.401.461.491.791.48 Share of CN inventor per CIP (%, ) 35.6628.5733.8039.9137.9935.6035.4640.4839.0937.6338.8337.85 Share of CN as first inventor to total CIP (%) 27.7811.1111.4810.0020.4824.3225.6027.2221.6522.4026.5223.15 Patent assigned to CN 10203794932114181 Total CIPs 36276160831111251581943844111,650 Share of CN ownership to total CIP (%) 2.780.003.280.003.616.317.202.534.648.3327.7410.97 Avg assignee count 11.040.920.80.991.021 1.04 1.241.01 18 Table 2 Statistical summary on co-invention: authorship and ownership

19. To what extent have co-invented patents accounted for China’s total patent production share? Who partners with China to jointly invent? Under what type of technological fields does joint invention occur? 1 out 3 patented granted by USPTO which China has participated are the products of international technological collaboration The US is the most predominant collaborative partner with China, accounts for 52% of all the co-invented patents Category 4 (Electrical and Electronic) accounts for most of the joint inventing activities, followed by category 2 (Computers and Communications) Characteristics of the coinventorship structure (cont’d) How the authorship and ownership of China’s co-invented patents reveal the collaboration nature? It appears that a major portion of the co-invented activities are non-Chinese driven patenting events.

20. The determinants of joint invention of countries CI cit = Constant + Dominance cit +First cit + Ownership cit + Technology cit + Geography i + Culture i + RGDP cit + GGDP ct + e cit c: China i : the country index t : the year index. The explainatory variable CI cit is the propensity of China and country i jointly engaging in patenting during year t, considering their respective patent stock. It is computed by taking the number of co-invented patent (CIP) between China and country i in period t divided by the net of the total patent production of China and of country i less the numerator CIP; the result is expressed in percentage term. 20

21. Table 3 Variable definition and descriptive VariablesDefinitionSourceMean S.D. Min. Max. CI No of co-invented patent (CIP) between China and country i in period t divided by net of the total patent production of China and of country i less the no of the co-invented patents, expressed in percentage term. USPTO0.220.40.012.21 First Proportional share, in percentage term, of Chinese inventor being the first inventor of the CIP to the total count of CIPs between China and country i. USPTO22.1323.370100 Dominance Proportional share, in percentage term, of China inventor counts to the total inventor counts in the co-invention teams between China and country i. USPTO31.8911.1511.3957.83 Ownership Proportional share, in percentage term, of patent ownership assigned to China entities to the total count of CIPs between China and country i. USPTO5.5112.97071.53 Technology Proportional share, in percentage term, of patents pertaining to technological IT related classes (class 2 and 4 ) to all CIPs between China and country i. NBER38.633.6401 Geography Dummy variable, country of APEC members is coded as 1, otherwise 0. APEC0.70.4601 Culture Dummy variable, country of ethnic Chinese is coded as 1, otherwise 0. APEC0.230.4201 RGDP Relative GDP per capita of to that of country i, in percentage term. APEC5.562.652.2914.43 GGDP Annual GDP growth rate of. APEC9.661.377.611.9 21

22. Table 4 Correlation matrix of variables Variables123456789 1 CI1 2 First0.0261 3 Dominance0.4360.1421 4 Ownership0.3210.237 1 5 Technology0.5140.2100.4640.1951 6 Geography0.2290.1590.3750.1420.2951 7 Culture0.663-0.0490.4360.1140.6910.3561 8 RGDP0.531-0.0070.1990.2010.1790.2660.3711 9 GGDP0.3330.1540.0520.3140.256-0.100-0.0040.3321 22

23. Table 5 OLS estimated results on the determinants of China’s co-inventorship Variables Model 1Model 2Model 3 Coeff. S.E.Coeff. S.E.Coeff. S.E. First-0.00180.0014-0.00030.0012 Dominance0.0069**0.00330.0005*0.0028 Ownership0.0042*0.00260.0039*0.0023 Technology0.0040***0.0011 Geography-0.03750.0785-0.05970.0693 Culture0.4930***0.0783 RGDP0.0711***0.01440.0585***0.01320.0347***0.0122 GGDP0.0510*0.02790.02150.02670.0598**0.0229 Constant-0.6663**0.2570-0.6472**0.2644-0.8069***0.2249 Adj R 2 0.290.480.59 No. of Observations87 23

24. Regression Findings 2 Being Asia neighboring countries or APEC countries does not enhance the propensity to co-invent with China. 3 Being having ethic Chinese affiliation is the determining factor in influencing the likelihood of having joint inventing activities with China. 4 In terms of the technological realm of collaboration, our results show the technological fields for coinventorship align with the country’s relative strength. 1 The propensity for having coinventorship between China and foreign partners increases with China’s GDP level.

25. Conclusion 25 Text in here China has not played a prime role in these co-inventing activities. Instead, China currently plays a supporting role in the international coinventorship. The relative high co-invented patent share to her total patent production is another indication of the dependency on or the leverage of foreign collaborators in boosting China’s international patent production. We also observe evidence of improving autonomy as the proportion of assignment endowed to Chinese entities increases, with a positive time trend. There is an apparent surge in China’s co-invented patents in the past decade.

26. Conclusion (cont’d) Limitation and Future Study For future studies, researchers could look into patent citation data and address the issue of international co-inventions with a more refined quality and impact analysis. Kostoff et al.(2007) point out that collaborating with external countries produces a substantial increase in number of Chinese articles published, and the major impact is particularly at the high end. In this study, we assess various quantitative aspects of co-invented patents, yet we have not dealt with the qualitative aspect.

27. Questions 27 Please email me at sljang@ntu.edu.tw

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