Cross-regional Pharmaceutical Technology Transfer in China: Patterns and Proposed Investment Strategies

The Chinese pharmaceutical market is undergoing dramatic growth, with a huge population, urbanization, a growing number of elderly patients, and increases in the standard of living. As a research-based and high-tech sector, the pharmaceutical industry depends highly upon technological innovation, especially the spatial diffusion of technologies from the perspective of economic geography. In this context, an analysis of technology flowing between regions is of great significance for the investment in a regional market. This article differs from previous studies by focusing on geographic patterns of pharmaceutical technology transfer captured by patent licensing in China, which are further used to analyze investment strategies. The research sample is composed of all pharmaceutical patent licenses filed with the State Intellectual Property Office of China from January 1, 2009, through December 31, 2012. As a result, a geographic network of pharmaceutical technology diffusion in China could be visualized, and province-level regions were ranked and classified into 3 types-input, output, and balance-by various network indicators. Finally, potential investment strategies on different types of regions are recommended for firms abroad, technology holders, contract research organizations, and technology agencies.