ABSTRACT Patent quality serves as a critical indicator of a nation's technological competitiveness and the effectiveness of its innovation system. While extant research has provided rich insights into the drivers of innovation from the perspectives of internal corporate governance and external institutional environments, comparatively limited attention has been paid to the mechanisms embedded within supply chain direct equity relationships. Using a dataset of listed firms in China from 2007 to 2023, we find that direct equity ownership within supply chains significantly enhances the quality of corporate patents. The identified channels include the improvement of relationship‐specific R&D investment and supply chain collaboration. Heterogeneity analyses further reveal that the positive effect of direct ownership within supply chain on patent quality is more pronounced among firms with a lower proportion of female executives, those operating in industries with weaker knowledge spillovers, and those in less concentrated supply chains. Overall, this study provides both theoretical insights and practical implications for improving supply chain governance and innovation policy design.
Zhang et al. (Mon,) studied this question.