Intellectual Property Rights Protection, Intermediate Product Import, and Export Product Quality

Based on Chinese industrial enterprises data and Chinese customs data from 2000 to 2013, the paper examines the micromechanism of intellectual property rights protection affecting the quality upgrade of firms' export products. The empirical results show that strengthening intellectual property right (IPR) protection has a specific and significant role in promoting the quality upgrade of firms' export products; the estimation results are still robust after using instrumental variables to overcome endogenous biases. Heterogeneity analyze results show that IPR protection has a relatively more significant effect on the quality improvement of export products for foreign-funded firms, high-tech industry firms, firms that import intermediate goods from OECD countries, and firms that import high-tech intermediate goods. Further analysis finds that IPR protection promotes quality upgrade of firms' export products through the intermediate goods quality effect, product category effect, and technology spillover effect; the expansion of the scale of imported intermediate products brought about by the strengthening of IPR protection has produced a "substitution effect" on the production capacity and R&D capabilities of Chinese upstream industries, and when expanding production capacity, it is necessary to strengthen technology research and development capabilities of the upstream intermediate product industry and improve the quality and technology of intermediate products so as to alleviate the negative impact of the expansion of foreign intermediate product imports and supply. Strengthening IPR protection will further enhance the "Washington apple effect" of the import of intermediate goods, and special attention should be paid to import partners with the long-distance and high-quality intermediates in the formulation and implementation of trade policies. The study is helpful for policymakers to formulate correct and effective IPR protection policies and foreign trade policies and also provides empirical evidence and useful inspiration for improving Chinese enterprises' innovation level and promoting the upgrading of intermediate products production under the current IPR protection strategy.