Technological disruption and patent activities: adoption of robots by Chinese manufacturing firms

Abstract

Using a panel of manufacturing firms in China for the period 2006 to 2015, this study investigates how the adoption of industrial robots, as a technological disruption, affects firm patent activities through intra‐industry interactions (robot adoption by peer firms in the same industry) and inter‐industry input–output linkages (robot adoption by upstream suppliers or downstream customers). We also test how these impacts are shaped by firms' absorptive capacity and external intellectual property right (IPR) protection. Our findings suggest that downstream robot adoption significantly drives firms' patent activities, whereas the impacts of robot adoption by peer firms and upstream suppliers are not statistically significant. Furthermore, the impact of robot adoption by downstream customers is magnified when firms have greater absorptive capacities and benefit from stronger IPR protection. We also exploit a policy change in 2012 related to high‐end intelligent equipment manufacturing as a quasi‐natural experiment to identify the effects of robot adoption as a form of technological disruption through different channels. Our study contributes to the literature on how technological disruption and associated uncertainties in the intra‐ and inter‐industry linkages affect firms' patent activities.