The Nonlinear Relationship between Intellectual Property Protection and Farmers’ Entrepreneurship: An Empirical Analysis Based on CHFS Data

Abstract

Using data from three rounds of the China Household Finance Survey (CHFS) in 2015, 2017 and 2019, this paper analyzes the impact and mechanism of the action of intellectual property protection on farm household entrepreneurship, based on institutional theory. It is found that: an inverted U-shaped relationship is shown between IPR protection and farm household entrepreneurship, but combined with the results of further research on farm household entrepreneurship performance, there is a positive effect of IPR protection and entrepreneurship performance. This indicates that excessive IPR protection, although limiting the number of entrepreneurship, boosts high-quality entrepreneurship; regional investment plays a mediating role between IPR protection and farm household entrepreneurship; and the results for IP protection and farmer opportunity entrepreneurship are the same as the baseline regression but have no significant effect on farmer initiative entrepreneurship, suggesting that IP protection more often increases farmers’ access to entrepreneurship. The above findings expand the application of “protecting intellectual property is protecting innovation” in farmers’ entrepreneurship and provide ideas for the implementation of intellectual property to promote, enrich and strengthen agriculture.

1. Introduction

In November 2020, General Secretary Xi Jinping pointed out that “innovation is the first driving force leading development, and protecting intellectual property rights is to protect innovation”. Innovation and entrepreneurship is not only the need for factor power conversion but also depends on the institutional environment [1]. The special nature of the “three rural” issue gives farmers’ entrepreneurship greater economic and social significance. In recent years, the state has issued a series of policy documents to support farmers’ entrepreneurship. For example, the 19th Party Congress pointed out that farmers should be encouraged to start their own businesses and broadened the channels for farmers to increase their income; the Central Document No.1 of 2020 explicitly requires the in-depth implementation of rural innovation and entrepreneurship leader cultivation action.

However, with the rise of farmers’ entrepreneurship, the problem of infringement of agricultural products has gradually come to the fore, seriously limiting the enthusiasm and performance of entrepreneurship. For example, an agricultural company without its permission selling the name of the product link, using the words “Kulle balsam pear”, was found to have infringed on its exclusive trademark rights. China Quality News reported that, with Yangcheng Lake hairy crab, as nationally known geographical indication products, there are “ten crabs nine fake” in the market. With the frequent occurrence of similar infringements, who should protect intellectual property rights? Although there are many subjects involved in the protection of intellectual property rights, the government has the power to identify geographical indications, trademarks and other intellectual property rights, so this paper takes the government’s protection of intellectual property rights as the starting point. In fact, intellectual property rights of such agricultural products as geographical indications have obvious value-added effects and premium effects [2]. For this reason, in 2021, the State Intellectual Property Office emphasized that “we should support the innovative economy based on patents, the brand economy based on trademarks and the special economy based on geographical indications of agricultural products, so as to truly realize the organic integration of intellectual property rights and rural revitalization”.

Current studies in the literature related to factors influencing farm household entrepreneurship discuss individual characteristics, such as cognitive ability [3]; financial literacy [4] and management skills [5]; household characteristic factors, such as family structure [6], mobility constraints [7] and digital literacy [8]; and macro policy environment aspects, such as agricultural subsidies [9], land titling [10] and technological advances [11]. As a manifestation of the institutional environment, while some scholars argue that intellectual property protection can contribute to the ternary relation of the “entrepreneurial orientation–innovation–entrepreneurship” triad and further promote entrepreneurial behavior [12], others argue that strong intellectual property protection can prevent knowledge spillovers from occurring and thus discourage the entry of new firms [13] and the development of entrepreneurial activities. The reason for this is that there are differences in the effects of IPRs in different parts of entrepreneurial activity and in the areas to which they belong [14]. Since farmers are disadvantaged in terms of resource endowment and knowledge level compared to enterprises or university students, this paper focuses on the impact of IPR protection on farmers’ entrepreneurship.

Based on the above analysis, this paper empirically analyzes the relationship between intellectual property protection and farm household entrepreneurship, using data from three rounds of the China Household Finance Survey (CHFS) in 2015, 2017 and 2019. The main contributions of this paper over previous studies are as follows: (1) In terms of research intention, the impact of intellectual property rights on farmers’ entrepreneurship is expanded by taking the more vulnerable farmers as the research object. This paper takes into account the characteristics of farmers’ lack of knowledge and ability and finds that moderate IPR protection helps to promote farmers’ entrepreneurship, but excessive IPR protection restricts farmers’ entrepreneurship, i.e., there is an inverted U-shaped relationship between the two. It is important to enrich the existing entrepreneurship theory and to support farmers’ entrepreneurship. (2) In terms of research mechanism, based on the theory related to the value of environmental resources, this paper constructs an empirical analysis framework of “institutional environment–regional investment–entrepreneurship” and explores the transmission influence path of intellectual property protection on farmers’ entrepreneurship from the perspective of regional investment and expands the role of intellectual property in farmers’ entrepreneurship from passive protection to active investment attraction. (3) In the further study, we explicitly analyze the difference in the impact of IP protection on opportunistic and proactive entrepreneurship, and we find that excessive IP protection, while limiting farmer entrepreneurship, can improve entrepreneurial performance. This is beneficial to achieve both quantitative and qualitative balance of IPRs in high-quality entrepreneurship for farmers’ entrepreneurship.

2. Literature Review and Theoretical Framework

2.1. Direct Effect of Intellectual Property Protection and Farmer Entrepreneurship

The new institutional theory states that institutions are the “rules of the game” that society needs to follow and that individuals must be embedded in a common code of conduct, such as regulations, culture and social norms [15]. Individuals ensure entrepreneurial legitimacy and resource availability through compliance with institutional arrangements, and thus, the institutional environment guides, supports and constrains entrepreneurial activities and can significantly influence people’s entrepreneurial behavior decisions [16]. Intellectual property protection, as a macro-level institution, not only regulates the behavior of individuals but also promotes innovation in society. A positive institutional environment also helps to increase farmers’ willingness to start a business [17]. The “capability–environmental pressure theory” suggests that individual capability and environmental pressure should be balanced. When individuals perceive environmental pressure, it brings negative emotions to negatively affect their entrepreneurial behavior [18]. This crack-down on farmers’ enthusiasm for entrepreneurship is not conducive to farmers’ entrepreneurial activities. Based on this, the relationship between intellectual property protection and farmers’ entrepreneurship is discussed.

On the one hand, the protection of intellectual property rights cannot only provide a good entrepreneurial environment for farmers but can also provide entrepreneurial opportunities and resources for rural areas, thus helping farmers to start their own businesses. Specifically, IPR protection may influence farmers’ entrepreneurship through the following ways: First, IPR, as the core content and key factor of innovation and entrepreneurship practice, is an important force and source of promoting public entrepreneurship [19]. The implementation of the IPR protection policy can effectively combat against infringement of IPR and illegal acts, such as making and selling counterfeits. Nowadays, the illegal use of geographical indications and agricultural brands has occurred repeatedly, and good IPR protection effectively protects the legitimate interests of farmers and effectively reduces the cost of farmers’ innovation and entrepreneurship, which can help farmers start their own businesses [20]. Second, entrepreneurship is an environment-oriented behavior, and a good entrepreneurial environment can significantly increase the three-dimensional capital of entrepreneurial individuals, thus helping them to start their own businesses. Intellectual property protection can improve the social trust environment and enhance the degree of social trust. When people are in an environment of mutual trust, they can better share information and knowledge and form teams, which is conducive to helping farmers identify opportunities for entrepreneurship [21]. This can motivate them to start their own businesses. Third, the IPR system can stimulate individuals’ independent innovation activities [22], and new technologies, such as cloud computing and big data, can be used to develop new models, new products and new services. Farmers can use it not only to innovate their own products but also to innovate the production and marketing docking mode to effectively ensure that good products are produced and sold well. With the development of the e-commerce platform, the docking of agricultural products of origin and consumers is truly realized, and the value brought by the brand of agricultural products and GI agricultural products can be maximized, helping farmers to start their own business and giving full play to the role of intellectual property protection in supporting and guaranteeing farmers’ business. To sum up, intellectual property rights can promote farmers’ entrepreneurship.

On the other hand, The protection of intellectual property rights is a process from the establishment of protection to comprehensive protection, from weak to strong protection. With the continuous improvement and maturity of intellectual property protection, the protection of intellectual property will create a technical barrier to farmers at the bottom of the pyramid, that is, there will be pressure when the capacity does not reach higher requirements, inhibiting farmers from starting their own business. When intellectual property protection reaches a certain level, it may inhibit farmers’ entrepreneurship in the following ways: First, the “ability–environment pressure theory” suggests that a balance between individual ability and environmental pressure must be achieved, which also means that pressure will arise when the environment does not match the ability of an individual [23]. Intellectual property protection, as a macro system environment, gradually improves while putting better requirements on individuals, which can lead to some uncomfortable behaviors or negative feelings of individual farmers. The rural public itself suffers from a low level of IPR protection, a lack of awareness of respect for others’ IPR and a lack of knowledge of how to use IPR-related information in the process of applying IPR. Therefore, the increasing improvement of IPR protection may create technical barriers to lower-level farmers, making the problem of farmers’ lack of capacity and resource endowment magnified. When farmers face greater pressure, they will be less motivated to start their own businesses, thus inhibiting them from doing so. Secondly, when intellectual property protection is not yet perfect, the definition of agricultural brands and geographical indications was not perfect, and there were some cases of violation. Some farmers would take advantage of the easy sale and high price of such agricultural products in the surrounding areas to carry out entrepreneurial activities, but as the level of intellectual property protection continues to improve and the definition of geographical indications and agricultural brands becomes more perfect and detailed, it will exclude farmers who use intellectual property rights such as geographical indications informally, thus creating a “crowding-out effect” on them and inhibiting the entrepreneurial behavior of such farmers. In both cases, strong IPR protection will discourage farmers from starting their own businesses. Based on the above analysis, this paper proposes the following research Hypothesis 1.

Hypothesis 1.

There is an inverted U-shaped relationship between IPR protection and farmer entrepreneurship.

2.2. Indirect Effects of IP Protection and Farmer Entrepreneurship: The Role of Regional Investment

Due to the different institutional mechanisms of each city in China, the institutional environment shows significant differences between different cities, and the institutional environment is an important factor affecting investment [24]. Good protection of intellectual property rights helps to attract investment. Coupled with the protection of such intellectual property rights as geographical indications for agricultural products, this gives the legitimate users the exclusive right to use such trademarks, means that it is not transferable and can only be produced in the protected area and determines that enterprises need to invest in this area if they want to produce that type of agricultural products. However, from the classical theory of IPR protection and the practice of developed countries, there is an optimal value of IPR protection. Optimal IPR protection design theory suggests that the IPR system has a dual effect, so the level of IPR protection should be moderate. If IP protection is too strong, it will instead increase the cost of entry for investors, thus discouraging investment entry.

Specifically, on the one hand, strengthening the protection of intellectual property rights can promote the inflow of external investment, thus creating more entrepreneurial opportunities, and can also enhance the skills of potential entrepreneurs through spillover effects or correlation effects. At the early stage of intellectual property protection, the definition of such intellectual property rights as agricultural brands and geographical indications was not mature, as geographical indications cannot only drive the development of marginal rural areas but also the development of tourism industry, service industry and related industries [25]. Based on the proprietary nature of GI agricultural products and the development of related industries, such as tourism, investment will be attracted, thus increasing the number of investments. On the other hand, the better protection of intellectual property rights will increase the cost and requirements for investors to enter. With the definition of regional brands and geographical indications also becoming more and more perfect, some surrounding areas cannot continue to use regional brands and geographical indications, which will make the investment of enterprises more precise, reducing the quantity of investment while improving the quality of investment. However, in the process of farmers’ entrepreneurship, the shortage of capital is a major problem that restricts farmers’ entrepreneurship. The entry of investment can precisely alleviate the problem of financing difficulties and the lack of capital for farmers, thus promoting farmers’ entrepreneurship. Based on the above analysis, this paper proposes the following research Hypothesis 2 and draws the theoretical framework Figure 1.

Hypothesis 2.

The number of regional investments acts as a mediator between IP protection and farm entrepreneurship.

3. Data Source and Model Setting

3.1. Data Sources

In this paper, macro-data and micro-data are used to match, and the data mainly involve two parts, one is individual and household level data and the other is data related to intellectual property protection. Among them, the individual and household level micro-data are obtained from the 2015, 2017 and 2019 China Household Financial Survey Database (CHFS), which is implemented by the Financial Survey Center of Southwest University of Finance and Economics, aiming to reflect China’s social changes and economic development by tracking and collecting data at three levels—individual, household and community—and providing important data support for domestic and international academic research. Since the research object of this paper is farm households, after excluding the urban sample and the sample with missing main relevant variables, a valid sample of 6758 households is finally obtained. In addition, the data on the level of IPR protection involve the number of IPR trial cases concluded and the GDP of each region. The number of IPR trial cases concluded in this paper is obtained from the judicial case database of Peking University Fabao, and the data on the GDP of each region are obtained from the China Statistical Yearbook. Ultimately, regional macro-data are used to match with household micro-data as a way to explore the impact of IP protection in the region on entrepreneurship among farmers in the area.

3.2. Model Setting

Considering that the explanatory variable of this paper, farm household entrepreneurship, is a binary discrete variable, the Probit model is used for the regression, and the expression of this model is:

$$Probi{t}_i={\beta }_0+{\beta }_{1}IP{P}_i+{\beta }_{2}IP{P}_i^2+{\beta }_{3}Contro{l}_i+\mu +\theta +{\epsilon }_i$$

(1)

where $Probi{t}_i$ is the explanatory variable, i.e., the entrepreneurial behavior of sample i. $IP{P}_i$ is the explanatory variable, i.e., the level of IPR protection in the city of sample i. $IP{P}_i^2$ is the square of intellectual property protection. $Contro{l}_i$ is a set of control variables. μ and θ are control city and year; ${\epsilon }_i$ is the random disturbance term.

In order to test Hypothesis 2, based on the basic model, the following model is constructed with reference to the three-step method of the Wen Zhonglin mediation test, as shown in models (2) and (3).

$$Inves{t}_i={\alpha }_0+{\alpha }_{1}IP{P}_i+{\alpha }_{2}IP{P}_i^2+{\alpha }_{3}Contro{l}_i+\mu +\theta +{\epsilon }_i$$

(2)

$$Entrepr{e}_i={\gamma }_0+{\gamma }_{1}IP{P}_I+{\gamma }_{2}IP{P}_i^2+{\gamma }_{3}Inves{t}_i+{\gamma }_{4}Contro{l}_i+\mu +\theta +{\epsilon }_i$$

(3)

where $Entrepr{e}_i$ denotes the explanatory variable, i.e., farm entrepreneurship. $IP{P}_i$ represents the level of intellectual property protection and its squared term. $Inves{t}_i$ represents the mediating variable, i.e., the number of regional investments. $Contro{l}_i$ denotes the control variables; μ and θ are control city and year; α, β and $\gamma$ represent the correlation coefficients. ${\mathsf{\epsilon }}_i$ represents the disturbance term.

3.3. Variable Selection and Descriptive Statistics

3.3.1. Explained Variables

Farmers’ Entrepreneurship. The explanatory variable is farm household entrepreneurship. In this paper, farmers’ entrepreneurship mainly includes two parts: engaging in industrial and commercial production and business and expanding the original production scale (family farms, cooperatives, etc.). The dummy variable for farm household entrepreneurship is constructed. CHFS designed the question in the 2015–2019 questionnaire, “At present, is your household engaged in industrial and commercial production and operation projects, including self-employment, leasing, transportation, online store, running a business, etc.”. In this paper, the answer “yes” is taken as 1, and the answer “no” is taken as 0, which is used as the entrepreneurship variable.

3.3.2. Explanatory Variables

Intellectual property protection. The level of IPR protection in cities is selected as the core explanatory variable. IP protection here covers all types of trademarks, patents, GI, copyrights, etc., from the total IP protection implemented by the government of the region. On the one hand, IPR as an important institutional environment has a guiding, supporting and restraining role for farmers’ entrepreneurial activities. On the other hand, the intensity of judicial protection for infringement of GI products will directly affect farmers’ entrepreneurship, so the number of IPR trials concluded by the people’s court of the city is selected to measure the level of IPR protection in the city. With reference to Shen Guobing’s study, from the policy level, the Opinions on Several Issues of Strengthening Reform and Innovation in the Field of Intellectual Property Trials issued by the General Office of the State Council in 2018 states that it is necessary to “continuously deepen the reform in the field of intellectual property trials and give full play to the leading role of judicial protection of intellectual property rights”. This shows that China is attaching more and more importance to the role of judicial trials in the protection of intellectual property rights. In terms of trend, the number of IPR trial cases in China continues to increase, and the data in “The State of Judicial Protection of Intellectual Property Rights in Chinese Courts (2021)” show that the number of IPR cases received and concluded by the people’s courts in 2021 reached a record high, both exceeding 600,000 cases. From the literature, Shen Guobing and Huang Shuojun showed that the number of concluded IPR trials can largely reflect the level of IPR judicial protection [26]. Since municipalities do not publish the number of IPR trial cases concluded, the number of IPR trial concluding cases heard by the people’s courts of each city included in the judicial case database of Beijing University Fabao was selected as a proxy variable for the number of IPR trial concluding cases in that city. Although the database does not cover all cases, the cases included in the database are all representative to a certain extent. Considering the difference in city size, with reference to WIPO’s [27] study, the city GDP is used for scaling. The specific method is as follows.

$$IP{P}_{it}=\left(\frac{Cas{e}_{it}}{{\displaystyle \sum }Cas{e}_{it}}\right)/\left(\frac{GD{P}_{it}}{{\displaystyle \sum }GD{P}_{it}}\right)$$

(4)

where $Cas{e}_{it}$ is the number of IPR cases in city i in period t. $GD{P}_{it}$ is the gross product of city i in period t. IPP represents the level of IPR protection, and the higher the value of IPP, the higher the level of IPR protection in the city where the sample is located.

3.3.3. Intermediary Variable: Number of Regional Investments

For the measurement of the number of regional investments, this paper adopts the number of inward investment strokes in each city published by the China Regional Innovation and Entrepreneurship Index published by Peking University to approximate the measure, and inward investments refer to cross-regional investments.

3.3.4. Control Variables

Existing studies on the factors influencing farmers’ entrepreneurship mainly focus on individual and household characteristics and external environmental factors, and this paper examines the role of intellectual property rights as an institutional environment; so, the control variables selected with reference to relevant literature include household head characteristics variables (age, gender, marital status, years of education and physical condition) and household characteristics variables (pension insurance participation, health insurance participation, owned housing and household size). The meanings of the variables and descriptive statistics are shown in

Table 1. Descriptive statistics.

Variable Name	Number of Samples	Average Value	Definition	Minimum Value	Maximum Value	Standard Deviation
Entrepreneurial behavior	6758	0.0886	1 means start-up, 0 means no start-up	0	1	0.284
Intellectual Property Protection	6758	0.725	The ratio of the number of intellectual property cases to the ratio of regional GDP	0.01	5.977	0.930
Age	6758	58.15	Age of head of household	17	97	11.90
Gender	6758	0.801	1 for male, 0 for female	0	1	0.400
Marriage Status	6758	0.955	1 means married, 0 means unmarried	0	1	0.207
Years of education	6758	6.873	Years of education	0	19	3.533
Physical Condition	6758	2.906	Self-assessed health status (very healthy = 1, healthy = 2, relatively healthy = 3, average = 4, unhealthy = 5)	1	5	1.043
Old-age insurance	6758	0.770	Whether to participate in pension insurance (Yes = 1, No = 0)	0	1	0.421
Medical Insurance	6758	0.938	Whether to participate in health insurance (Yes = 1, No = 0)	0	1	0.241
Homeownership	6758	0.927	1 means own property, 0 means no own property	0	1	0.260
Family size	6758	2.681	Number of people in the respondent’s household	1	12	1.414

.

4. Analysis of Empirical Results

4.1. Impact of Intellectual Property Protection on Farm Household Entrepreneurship

First, the variables were tested for multicollinearity, and the results showed that the VIF were below the critical value, indicating that the equations were not affected by multicollinearity. Then the data were subjected to Probit regression using Stata16. The test results of the direct effect of intellectual property protection on farmers’ entrepreneurship are shown in

Table 2. Direct effects of IPR protection on farmers’ entrepreneurship.

Variable	(1)	(2)	(3)	(4)	(5)	(6)
	Probit			OLS
Intellectual Property Protection	0.1279 ** (0.0562)	0.1471 *** (0.0589)	0.1589 *** (0.0593)	0.0208 ** (0.0089)	0.0242 *** (0.0090)	0.0254 *** (0.0089)
Intellectual Property Squared	−0.0239 * (0.0137)	−0.0264 * (0.0144)	−0.0289 ** (0.0145)	−0.0037 * (0.0021)	−0.0042 ** (0.0003)	−0.0045 ** (0.0021)
Age		−0.0175 *** (0.0019)	−0.0149 *** (0.0021)		−0.0027 *** (0.0106)	−0.0024 *** (0.0003)
Gender		0.0233 *** (0.0649)	0.2071 *** (0.0655)		0.0271 *** (0.0077)	0.0237 *** (0.0077)
Marriage Status		0.3479 *** (0.1277)	0.2519 * (0.1289)		0.0458 *** (0.0134)	0.0365 *** (0.0137)
Years of education		0.0285 *** (0.0073)	0.0287 *** (0.0075)		0.0036 *** (0.0010)	0.0035 *** (0.0010)
Physical Condition		−0.1277 *** (0.0223)	−0.1279 *** (0.0224)		−0.0192 (0.0033)	−0.0193 *** (0.0033)
Old-age insurance			−0.0611 (0.0524)			−0.0119 (0.0084)
Medical Insurance			0.1875 * (0.1042)			0.0202 * (0.0123)
Owned Housing			0.1253 (0.0983)			0.0082 (0.0109)
Family size			0.0939 *** (0.0159)			0.0103 *** (0.0027)
Constants	−1.2458 ** (0.0507)	−0.7058 *** (0.1874)	−1.2166 *** (0.2244)	0.1083 ** (0.0094)	0.2173 *** (0.0258)	0.1724 *** (0.0302)
Year and city fixed effects	Control	Control	Control	Control	Control	Control
Number of samples	6758	6758	6758	6758	6758	6758
Pseudo R2	0.0057	0.0591	0.0696	0.0037	0.0334	0.0364

Note: * means significance at the 10% level; ** means significance at the 5% level; *** means significance at the 1% level.

.

Columns (1)–(3) report the results of the impact effects estimated by the Probit model, where column (1) is the result without the inclusion of control variables and columns (2) and (3) are the results with the inclusion of individual characteristics variables and the inclusion of individual and household characteristics variables in that order. The results show that IPR protection has a significant positive effect on household entrepreneurship (β1 = 0.1589, p < 0.01), while the secondary term of IPR protection has a significant negative effect on household entrepreneurship (β2 = −0.0289, p < 0.05), controlling for individual and household characteristics. The slopes of the two endpoints were calculated from β1 and β2 as 0.025 and −0.028, which are opposite in sign. Also, the inflection point of the curve can be found to be 2.8217, which is within the range of values of IP protection and is significantly larger than the mean value of IP protection. Columns (4)–(6) are the results obtained from the estimation using the OLS method. The results show that the level of IPR protection has a significantly positive effect on farm household entrepreneurship, and the quadratic term of IPR protection has a significantly negative effect on farm household entrepreneurship; the sign and significance of the estimated coefficients remain consistent when control variables are gradually added. It can be shown that, on the one hand, elevated IPR protection enhances the social trust of farm households and provides good opportunities and resources for farm households to start their own businesses, thus promoting them to do so. On the other hand, excessive IPR protection raises the threshold of entrepreneurship and imposes higher requirements on individual farmers, thus discouraging farmers from starting their own businesses. This coincides with the finding of an inverted U relationship between IPRs and innovation at the high quartile level noted in the Reis study [28]. In summary, there is an inverted U-shaped relationship between IPR protection and farmers’ entrepreneurship, thus verifying Hypothesis 1 of this paper.

As far as the control variables are concerned, the results show that the control variables are effective. In particular, the higher the head of household is male, married and educated, the more it is conducive to entrepreneurship, while on the contrary, the older the head of household is, the more the health condition inhibits entrepreneurship. In addition, the size of the household significantly promotes entrepreneurship, and the larger the household size means that the household has more contacts and entrepreneurial resources, which can better provide a strong support for farmers’ entrepreneurship; the above conditions, reflecting the entrepreneurship of farmers may be influenced by factors, such as family members and the situation of the household itself, which is basically consistent with the findings of existing studies.

4.2. Endogenous Processing

Although individual and household characteristics of household heads that affect the empirical results are controlled as much as possible in the empirical model in this paper, there may still be endogeneity problems due to data collection or omitted variables. In order to solve the endogeneity problem, the level of intellectual property rights in the province where the sample is located is selected as the instrumental variable, and the measurement is regressed using the IV-probit and 2SLS methods according to the measurement method of this paper. The estimation results of the instrumental variables are shown in

Table 3. Endogeneity test.

Variable	IV-Probit	2SLS
Intellectual Property Protection	0.8219 *** (0.1503)	0.1330 *** (0.0263)
Intellectual Property Protection Squared	−0.1788 *** (0.0353)	−0.0286 *** (0.0058)
Pseudo R2	0.8742	0.8743
Phase I F-value	4270	1830.33
Tool variable T value	36.31	51.27
Wald test	24.51 (0.0000)	257.93 (0.0000)
DWH test Chi2	-	20.66 (0.0000)
Underidentification test	-	333.159
p-value	-	0.0000
Wald-F	-	1318.69
KP Wald-F	-	594.29
Control variables	Control	Control
Year and city fixed effects	Control	Control
Data volume	6758	6758

Note: *** means significance at the 1% level.

. In terms of the regression results of the IV-probit, the F-values of the first-stage regressions are all greater than the critical value of 16.38 at the 10% bias level, and the t-test results of the instrumental variables were significant at 1% confidence level; so, the original hypothesis of weak instrumental variables was rejected, and the IV-probit model also passed the Wald test. Regarding the regression results of 2SLS, the coefficient of the quadratic term of IPR protection on farm household entrepreneurship is significantly negative (β2 = −0.0286, p < 0.01), and the original hypothesis of “unidentifiable” is strongly rejected. Finally, 2SLS is not a weak instrumental variable because the value of Kleibergen-Paap rk Wald F is greater than the statistical value of the critical point. Summarizing the above two models, the inverted U-shaped relationship that exists between IP protection and farm household entrepreneurship is robust after using the two-stage instrumental variables regression.

4.3. Robustness Tests

4.3.1. Substitution Variables

In this paper, the independent variable of this paper is replaced by “IPR protection” in the China Marketization Index 2015–2019 compiled by Fan Gang, which has the advantage of being comparable across years and can better eliminate the influence of dimensionality with a single indicator. The regression results are shown in

Table 4. Robustness tests.

Variables	(7)	(8)	(9)
	Farmers’ Entrepreneurship	Farmers’ Entrepreneurship	Farmers’ Entrepreneurship
Intellectual Property	0.1136 *** (0.0229)	0.2653 *** (0.0739)	0.3976 *** (0.1428)
Intellectual Property Squared	−0.2970 *** (0.0874)	−0.0466 *** (0.0180)	−0.0896 ** (0.0436)
Control variables	Control	Control	Control
Year and city fixed effects	Control	Control	Control
_cons	−0.9319 *** (0.2699)	−1.7836 *** (0.2384)	−1.5526 *** (0.2763)
N	6758	3575	2878
Pseudo R2	0.0791	0.0327	0.0707

Note: ** means significance at the 5% level; *** means significance at the 1% level.

model (7), which shows that the primary coefficient of IPR protection is significantly positive and the secondary coefficient is significantly negative, which is consistent with the baseline regression results of this paper, indicating the robustness of the results.

4.3.2. Delete Some Samples

In order to ensure that the entrepreneurial group is more dynamic, the sample households whose head is over 60 years old are excluded from this paper. The regression results are shown in Table 4 model (8), which shows that the primary coefficient of IPR protection is significantly positive and the secondary coefficient is significantly negative, showing an inverted U-shaped relationship between the two. The results are consistent with the baseline regression results of this paper, indicating the robustness of the results of this paper.

4.3.3. Replacement Database

The database used in this paper is the China Household Finance Survey database, and in order to confirm the validity of the database, the cross-sectional data of CFPS 2018 is selected for regression in this paper, and the results are shown in Table 4 model (9), from which it can be seen that the coefficient of the primary term of IPR protection is significantly positive and the coefficient of the secondary term is significantly negative, indicating that the inverted U-shaped relationship between IPR protection and farm household entrepreneurship is robust and consistent with the results of the baseline regression results of this paper.

4.4. Intermediary Mechanism Test

According to

Table 5. Intermediary effect test.

Variables	(10) Farmers’ Entrepreneurship	(11) Foreign Investment	(12) Farmers’ Entrepreneurship
Intellectual Property Protection	0.1589 *** (0.0593)	0.5163 *** (0.0217)	0.1583 ** (0.0649)
Intellectual Property Protection Squared	−0.0289 ** (0.0145)	−0.0769 *** (0.0049)	−0.0280 * (0.0147)
Number of inward investment			0.1051 *** (0.0402)
Constant term	−1.2166 *** (0.2244)	3.5624 *** (0.0825)	−1.7812 *** (0.2753)
Control variables	Control	Control	Control
Year and city fixed effects	Control	Control	Control
N	6758	6758	6758
Pseudo R2	0.0696	0.1308	0.0659

Note: * means significance at the 10% level; ** means significance at the 5% level; *** means significance at the 1% level.

, model (11) shows a significant inverted U-shaped relationship between IPR protection and the quantity of regional investment (α1 = 0.5163, p < 0.01; α2 = −0.0769, p < 0.01). That is, the initial period of IPR protection will lead to an increase in the number of regional investments, and as IPR protection is strengthened, although it will improve the quality of investments, the number of regional investments will decrease. The results of model (12) show that the number of regional investments significantly promotes entrepreneurship among farmers (${\theta }_3=0$.1051, p < 0.01), and the coefficient of its key explanatory variable becomes smaller with the inclusion of mediating variables; so, it can be argued that the quantity of regional investment mediates the relationship between IPR protection and farmers’ entrepreneurship. The increase in IPR protection helps to increase the number of regional investments and alleviate the shortage of capital for farmers, thus promoting their entrepreneurial activities, while the high IPR protection creates barriers and has a “crowding-out effect” on entrepreneurial behavior in the informal surrounding areas. The increase in the threshold for entrepreneurship also discourages farmers from starting their own businesses; thus, this is not conducive to the entrepreneurial activities of farmers.

5. Further Analyses

5.1. Heterogeneity Analysis of Farmers’ Entrepreneurship Types

Differential entrepreneurship types triggered by different motivations may lead to differences in individual well-being [29]. The type of entrepreneurship has different effects on individual entrepreneurship, economic growth and employment solutions. While we focus on the quantitative changes of entrepreneurship, we should not ignore the structural and qualitative changes of entrepreneurship. Based on the classification of entrepreneurship by Global Entrepreneurship Monitor (GEM), this paper classifies entrepreneurial behavior into two categories according to their motives: farmer opportunity entrepreneurship and farmer survival entrepreneurship. Survival entrepreneurship refers to entrepreneurial activities that farmers are forced to engage in without other employment opportunities, while opportunity entrepreneurship refers to entrepreneurial activities in which farmers take the initiative to seize business opportunities. Opportunity-based entrepreneurship has better growth and influence in raising employment levels, promoting economic development and optimizing industrial structure [30]. Therefore, the increase in the rate of opportunity-based entrepreneurship can, to a certain extent, indicate the improvement in the quality of entrepreneurship. Levine points out that a clear distinction between different types of entrepreneurship can avoid misleading inferences about entrepreneurship [31]. Levine also points out that a clear distinction between different types of entrepreneurship can avoid misleading inferences. Other scholars point out that opportunity-based entrepreneurship is the main way for farmers to alleviate economic hardship and move towards prosperity in China. Most farmers have alleviated their economic hardship to some extent through active entrepreneurship, while a few farmers have not only become rich through opportunity entrepreneurship but have also included industry-related farmers in their entrepreneurial activities, thus leading to common prosperity. It has also been pointed out that regional differences and locational environment can lead to different motivations of farmers’ entrepreneurial behavior. In summary, it is necessary to explore whether different types of farmer entrepreneurship are equally affected by IPR protection.

For the definition of entrepreneurship types, the main reasons for households to engage in commercial and industrial production and operation projects are “ideal hobby, want to be my own boss” and “more flexible, more comfortable”. The main reasons for households to engage in commercial and industrial production and business projects are “ideal hobby, want to be my own boss” and “can earn more” and “more flexible and comfortable”, and the rest of the responses are defined as active entrepreneurship. The regression results are shown in

Table 6. Impact of intellectual property protection on the type of entrepreneurship of farmers.

Variables	(13) Opportunistic Entrepreneurship	(14) Proactive Entrepreneurship
Intellectual Property	0.2586 ***	−0.0538
	(0.0704)	(0.0771)
Intellectual Property Squared	−0.0464 ***	0.0075
	(0.0177)	(0.0176)
_cons	−1.5687 ***	1.8834 ***
	(0.2793)	(0.3039)
Control variables	Control	Control
Year and city fixed effects	Control	Control
N	6758	6758
Pseudo R2	0.0866	0.0292

Note: *** means significance at the 1% level.

, which shows an inverted U-shaped relationship between IPR protection and opportunity entrepreneurship among farm households (β1 = 0.2586, p < 0.01; β2 = −0.0464, p < 0.01). The possible explanation is that opportunity entrepreneurship is a process in which individuals “take the initiative” to start a business in search of independence, self-fulfillment and wealth creation. The key elements are resources and opportunities [30]. The opportunity entrepreneurship view is that the entrepreneur is driven by the opportunity to start a business by combining appropriate resources according to the characteristics and needs of the opportunity, i.e., the core of entrepreneurship is to identify and develop opportunities. The resource-based view of entrepreneurship is that entrepreneurs take full advantage of resources to find matching entrepreneurial opportunities to start a business according to the characteristics of the resources, i.e., the root of entrepreneurship is to integrate and coordinate the limited resources from the environment. In other words, the root of entrepreneurship is the integration and coordination of limited resources from the environment. Intellectual property rights, such as trademarks, brands and geographical indications not only provide entrepreneurial opportunities for farming families but also intellectual property rights themselves are a kind of entrepreneurial resources and provide families with the resources needed to start their own businesses, thus promoting entrepreneurship among farming families. However, as the level of IPR protection increases, the disadvantage of farmers’ own quality and lack of knowledge ability will be magnified, and the increased threshold of entrepreneurship will put forward higher requirements for farmers. Farmers’ own weak learning ability will restrict their identification of entrepreneurial opportunities, thus inhibiting the opportunity-based entrepreneurship of farmers. Compared to opportunity-based entrepreneurship, intellectual property protection has little effect on household initiative-based entrepreneurship.

5.2. Impact of IPR Protection on Farmers’ Entrepreneurial Performance

At present, China is at a special stage from high speed development to high quality development. Attention should be paid to not only the change of entrepreneurship quantity but also the improvement of entrepreneurship structure and quality. Based on the inverted U mechanism of intellectual property protection and farmers’ entrepreneurship in this paper, the inhibitory effect on farmers’ entrepreneurship after intellectual property protection reaches its optimal point is targeted. This paper further explores the relationship between IPR protection and farm household entrepreneurship performance. After-tax business income is used to measure entrepreneurial performance. The regression results are shown in

Table 7. Impact of intellectual property protection on entrepreneurial performance of farmers.

Variables	(15) Entrepreneurial Performance
Intellectual Property Protection	0.3188 *** (0.0799)
Constant term	9.5913 *** (0.8188)
Control variables	Control
Year and city fixed effects	Control
N	6758
Pseudo R2	0.0350

Note: *** means significance at the 1% level.

. Since the non-linear results between IPR protection and entrepreneurial performance are not significant, this paper verifies the linear relationship between IPR and entrepreneurial performance, and the regression results are shown in (15). There is a significant promotion effect between IPR protection and farmers’ entrepreneurial performance (β1 = 0.3188, p < 0.01), indicating that IPR protection has a linear relationship with farmers’ entrepreneurial performance, i.e., the enhancement of IPR protection can promote farmers’ entrepreneurial performance. Entrepreneurial performance represents the quality of entrepreneurship to a certain extent, although excessive IPR protection will inhibit some farmers from starting a business and reduce the number of entrepreneurships. In general, however, it will improve the entrepreneurial performance of farmers and enhance the quality of entrepreneurship. Based on the above analysis, entrepreneurship does not lie in the quantity but in the quality of entrepreneurship and further confirms that intellectual property protection will significantly improve the quality of entrepreneurship among farmers.

6. Conclusions and Recommendations

6.1. Research Findings

Using the China Household Finance Survey (CHFS) data, this paper empirically analyzes the impact of IPR protection on farm household entrepreneurship and further analyzes its mediating transmission mechanism as well as the impact of entrepreneurship type and entrepreneurial performance. The study finds that: (1) an inverted U-shaped relationship is observed between IPR protection and farm household entrepreneurship. It indicates that a good level of IPR protection can maximize the promotion of farm household entrepreneurship, but as IP protection improves, it can create barriers for farmers, which in turn can inhibit farm entrepreneurship. (2) The number of regional investments mediates the relationship between IPR protection and farmers’ entrepreneurship. That is, there is an inverted U-shaped relationship between IPR protection and the number of regional investments, while the number of regional investments can significantly promote entrepreneurship among farmers. (3) IPR protection shows an inverted U-shaped relationship with opportunity-based entrepreneurship of farmers, while it has no significant effect on survival-based entrepreneurship. It indicates that IPR protection is more about providing opportunities and resources for farmers’ entrepreneurship, so the impact of IPR protection on farmers’ opportunity-based entrepreneurship is more significant compared to farmers’ initiative-based entrepreneurship. In terms of the performance of farmers’ entrepreneurship, the strengthening of IPR protection can improve the performance of farmers’ entrepreneurship, which also indicates that, although excessive IPR protection can inhibit farmers’ entrepreneurship, it can significantly improve the performance of farmers’ entrepreneurship, and the improvement of entrepreneurship performance shows the improvement of the quality of farmers’ entrepreneurship from the side. This also fully confirms that entering a new stage of development and promoting high-quality development is an inevitable requirement for maintaining sustainable and healthy economic development as pointed out in the Outline for Building a Strong Intellectual Property State (2021–2035) issued by the CPC Central Committee and the State Council.

6.2. Policy Recommendations

The following policy insights are proposed in response to the findings of this paper: (1) Attention should be given to the protection of intellectual property rights in each region while taking into account the comprehensive quality of farmers to create a favorable environment for farmers’ entrepreneurship. Along with the implementation of China’s newly revised Patent Law, Trademark Law, Anti-Unfair Competition Law and other laws and regulations, cities should continue to promote measures to strengthen intellectual property protection, create a good business environment, play an important role in intellectual property protection and inject inexhaustible power for the high-quality development of the regional economy. (2) Improve the mechanism for attracting investment in the region, and strengthen the awareness of investment promotion. Efforts will be made to create a strong atmosphere for officers and entrepreneurs in the region and to form an all-round, wide-field and multi-level investment attraction pattern. This can, to a certain extent, alleviate the problem of financing difficulties and capital shortage in the process of farmers’ entrepreneurship. (3) Focus on cultivating farmers’ ability to identify entrepreneurial opportunities and improve the availability of entrepreneurial resources. The government should increase the investment of entrepreneurial resources in rural areas and focus on opportunity-based entrepreneurship in rural areas. As China is at a special stage of high speed development to high quality development, opportunity-based entrepreneurship of rural households cannot only achieve high quality entrepreneurship but can also bring industry-related farmers into their entrepreneurial activities to achieve common prosperity. In summary, a multi-pronged approach is needed to promote entrepreneurial enthusiasm in rural areas.

6.3. Shortcomings and Prospects

This paper also has some limitations. On the one hand, previous IPR studies have mostly focused on enterprises and university students, while the continuous development of geographical indications and trademarks, coupled with the rise of the rural e-commerce industry, has gradually expanded the role of IPR to farmers. However, emerging IPRs, such as geographical indications, started late in China, and IPRs cover a wide range of types; so, there is a need to further refine the measurement of indicators for the protection of IPRs closely related to agriculture. On the other hand, how to further alleviate the inhibiting effect of IPRs after they reach a certain intensity is not covered in this paper and remains to be studied.