2.

2 Changing data files

. edit
. *(6 variables, 3732 observations pasted into data
editor)
. save
"C:\Users\Administrator\Desktop\Econometrics\pa
tent.dta"
file
C:\Users\Administrator\Desktop\Econometrics\pat
ent.dta saved
. clear
. *(6 variables, 90 observations pasted into data
editor)
. save
"C:\Users\Administrator\Desktop\Econometrics\in
dustry.dta"
2.3 Listingfile
the industry coding by collapse command
C:\Users\Administrator\Desktop\Econometrics\ind
ustry.dta saved

Industry coding between patent file and industry file is inconsistent

since the observation variable (obs)s patent file does not close to the real

value while is equal to 9 Moreover, there is a large number sample of

observation different between these two files.

2.4 Recode the industry coding

cd "C:\Users\User\Desktop\mastermind"
use patent.dta, clear
replace industry="paper and publishing" if
industry=="paper"
replace industry="paper and publishing" if
industry=="publish"
replace industry="textiles" if
industry=="apparel"
replace industry="food" if industry=="food "
replace industry="intermediate" if
industry=="intermediate "
replace industry="machinery" if
industry=="food mach"
replace industry="machinery" if
industry=="publish mach"
replace industry="machinery" if
industry=="intermediate mach"
replace industry="machinery" if
industry=="office mach"
replace industry="machinery" if
industry=="paper mach"
replace industry="machinery" if
industry=="agri mach"
replace industry="machinery" if
industry=="furniture mach"
Making two files be consistent

2.5 Generating pattern_count by using collapse command

cd
"C:\Users\User\Desktop\master
mind"
use tmp0.dta, clear
rename grantyear year
gen patcount=1
collapse (sum) patcount,
by(industry year)
save patent_count.dta, replace
br

File year should be used in making pattern court with the reason is

grant year data is 1 year slower than the file year data which spends

overtime time to research and lunch the journal. Furthermore, file year is
the year after complete innovation. If we choose grant year, it might be

able to create the lag data or even cause the difficulty of future

inspection.

2.6 Merging the patent count and industrial datasets into one data set

cd "C:\Users\User\Desktop\mastermind"
use industry.dta, clear
sort year industry
save tmp1.dta, replace
br
use patent_count.dta, clear
sort year industry
save tmp2.dta, replace
br
use tmp1.dta, clear
merge year industry using tmp2.dta
rename _merge mrg1
save combine.dta, replace
br
cd "C:\Users\User\Desktop\mastermind"
use combine.dta, clear
2.7 Creating new variables that contain R&D spending, export values and
production values in real term.

gen rrd=rdspend*100/cpi
gen rexpval=expval*100/cpi
gen
rprodval=prodval*100/cpi
save combine.dta, replace
Part III: Summary Statistics

3.1

According to the graph, there are an overall increasing between

patenting and R&D activity overtime after the reforms. Otherwise, the

result is insufficient to conclude whether the reforms have direct impact

on the rise of the rise of R&D. However, this indicates the good sign of

the research to know what actually the substantial effects on R&D

activity are.

3.2
 Export-intensive industry means Industries with greater access to

international markets invest heavily in technology and to have comparative

advantage on the products. This increases the productivity contributes to higher

earnings.

Due to the fact that everything is equal, the sum of export-import

value in compare with export ratio is equivalent to one which is the value

of export ratios in every sector are greater than 0.5, they will indicated

as export-intensive industries. Nevertheless, we could not use this

method due to the digit number of unit value. Alternative method is by

comparing overall mean of export ratio with export ratio value of

individual industry. If export ratio of individual industry greater than

overall mean of export ratio, it mean that product should be export-

intensive product.

As mentioned above, firm should be focus on the product: electric

and intermediate product, insert into export markets. Otherwise,

automobile, food, furniture, leather and machinery, paper and publishing,

textiles and other products should be put in domestic market.

3.3

Firstly, R&D can be viewed as intensive R&D industry or not which

in this case there are two industries that are qualified which are

automobile and intermediate industry.

Second, we also can use production value to distinguish whether it

is production intensive industry. From the data we have run there

are 3 industries that are productive intensive industry which are

electric, food, and textiles industry.