Intellectual property protection, infringement disputes, and, corporate innovation investment persistence

Abstract To examine the important role of regional intellectual property (IP) protection, we empirically check the impact of infringement disputes on corporate innovation investment persistence. We document that IP protection enforcement can significantly and negatively mitigate the infringer's innovation investment persistence but positively enhance that of the infringed firm. This effect is more pronounced for non‐high‐tech or non‐state‐owned firms. Moreover, IP protection mainly reshapes a firm's perceptions of innovation investment persistence through the efficiency and fairness of law enforcement. Our findings provide insights into optimizing the IP protection environment, especially for emerging economies.