By identifying the features of patent applications filed by 22 countries at the Chinese Patent Office from 1996 to 2003, this study finds that the main factors accounting for the recent patent boom in China can be attributed to the second revision of the Chinese patent law in 2000, the intensification of R&D expenditure both in China and the rest of the world, and the increasing foreign direct investment flowing into China. JEL classification: O30; O32; O34 The distance between a source country

more »

... to China is calculated by using a proxy of the distance between the capital of the source country to Beijing, the capital of China, in thousands of kilometers. Model Specification In terms of the Kortum-Lerner and Rafiquzzaman-Whewell approaches, i.e., Equations (1) and (2), China is considered here as the only destination country (n) and also as one of the 22 major source countries (i). I assume that the rate at which a country produces patentable inventions,  it , depends upon its annual R&D expenditure, RDE it . As perceived in the previous studies, such as Rafiquzzaman and Whewell (1998) and Cheung and Lin (2004) , either R&D expenditure or personnel can be identified as the determinant on the rate of generating patentable inventions because frequently R&D expenditure and personnel are highly correlated with each other. Technology diffusion, the probability that an invention from country i will be adopted in China in year t, or  nit , and the propensity to patent, f nt , -together depend on whether (1) China is the source country, n=i, (2) the www.ccsenet.org/ijbm