The impact of innovation policy and intellectual property judicial system on manufacturing corporate exploitative and exploratory innovation

We estimate how innovation policy and intellectual property judicial system adopted by the Chinese government since the 21st century, intellectual property demonstration cities (IP-City) and intellectual property courts (IP-Court), have affected manufacturing corporate exploitative and exploratory innovation. Empirically, we conduct the analysis based on panel data for 853 A-shared listed manufacturing corporations from 2010–2021 of China and difference-in-differences model. The findings indicate that IP-City and IP-Court contributed to increases in corporate exploratory innovation of approximately 14.6 % and 13.1 %, respectively, and that the two policies had complementary effects. However, the two policies do not significantly incentivize exploratory innovation. Alleviating financing constraints is an important mechanism for the IP-City policy. For corporations with better ESG performance, lower management power strength, located in the central and western regions, in high-tech industries, and in nonpolluting industries, the two policies had more pronounced effects.