Abstract:    Accelerating artificial intelligence (AI) technological innovation is crucial for China to gain the strategic advantages in the new round of global competition and to promote the development of new productive forces. Intellectual property (IP) protection is an essential institutional arrangement for stimulating innovative vitality. However, given the typical characteristics of AI innovation, the effectiveness of IP protection in facilitating innovation remains unclear. Based on the identification criteria of AI patents released by WIPO, we constructed a dataset of over 330,000 AI patent applications from 273 Chinese cities from 2010 to 2021. On this basis, the research employed the intellectual property demonstration city policy as a quasi-natural experiment framework and applies a multi-period DID model to examine the impact of IP protection on AI innovation. The results indicated that the IP demonstration city policy significantly promotes urban AI innovation through mechanisms such as the agglomeration of scientific and digital talents, enhanced innovation-oriented public expenditure, and introduction of venture capital. The heterogeneity analysis showed that the incentive effect of IP protection is pronounced in collaborative patents, foundational technology patents, and the output of invention patents. Further research revealed that IP protection not only increases the quantity of urban AI innovation but also contributes to improving innovation quality. This study will provide detailed evidence for the impacts of IP protection on AI innovation and offer valuable implications for fully leveraging the incentive effects of IP policies.

Key words: intellectual property protection, artificial intelligence technological innovation, intellectual property demonstration city, difference-in-differences (DID) model