We develop an index that compares the quality of Patent Cooperation
Treaty (PCT) applications by considering citations generated by International Search
Reports (ISRs). In its most restrictive variation, i.e. excluding citations from the home
country and self-citations, the ISR index is not biased by selectivity in filing strategies,
differences in citations due to varying national examination procedures, or domestic
economic policies. Against the background of strong increases in Chinese patenting
between 2001 and 2009, we compare the quality of Chinese PCT applications with
those from high-income countries. Chinese PCT applications achieve only 34% of the
quality level of international PCT applications. In addition, their quality is decreasing
over time. We find that the patent quality of firms increases in R&D stocks but
decreases with the introduction of PCT subsidies. Our results confirm that China’s
expansion of international filings was achieved to the detriment of quality.
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