Patent open licencing and corporate innovation boundaries

Although innovation boundary (IB) expansion matters for firms, whether patent licencing reform shapes it remains unclear. Using Chinese A-share listed firms from 2018 to 2024, this study employs a staggered difference-in-differences (DID) model to examine the association between patent open licencing reform (POL) and corporate IB. Results show that POL is positively associated with broader IB, implying a 44% increase in new-field patenting. The association is stronger for firms with greater absorptive capacity and weaker for those with tighter financing constraints. The findings provide micro-level evidence on how licencing-market reform relates to firms’ technological search scope.