Outward foreign direct investment (OFDI) is a core strategic path for firms to integrate global value chain resources and expand international market boundaries, and a critical channel for emerging economies to achieve industrial upgrading and technological catch-up. However, as Chinese firms accelerate their global expansion, overseas intellectual property (IP) disputes have remained persistently frequent, evolving into a major constraint on OFDI. The essence of these disputes is the institutional friction arising from cross-border IP institutional differences: When entering unfamiliar institutional environments, firms encounter conflicts because they struggle to adapt to host-country IP institutions, which ultimately impedes OFDI. How home-country governments can support firms to adapt to overseas IP institutions and facilitate their global expansion has thus become a pressing theoretical and practical issue.

Taking the establishment of the National Guidance Center for Overseas Intellectual Property Dispute Resolution as a quasi-natural experiment, this paper uses data of Shanghai and Shenzhen A-share listed companies from 2018 to 2023 to systematically investigate the impact of “targeted” IP support by governments on firms’ OFDI. The results show that the establishment of the Center significantly increases the OFDI level of local firms. Mechanism testing reveals that the Center promote firms’ proactive institutional adaptation by facilitating overseas patent deployment, while simultaneously strengthening the firms’ responsive institutional utilization by improving their win rates in overseas IP litigation. Heterogeneity analysis further indicates that the policy effects are more pronounced for technology-intensive firms, for reverse investment targeting developed countries, and for investment directed toward host countries with greater institutional distance. Moreover, the Center significantly expands the extensive margin of OFDI by facilitating first-time investment and the diversification of investment destinations.

This paper makes the following marginal contributions: First, unlike prior studies focusing on generic home-country support including fiscal subsidies, tax incentives, and bilateral investment treaties, it identifies targeted IP support as a new policy tool and clarifies the dual-path of cross-border IP institutional adaptation, advancing theories on government-backed corporate internationalization. Second, shifting from a focus on host-country IP protection, it adopts an institutional friction lens centered on firms’ micro adaptation behaviors, filling a critical research gap. Third, it pins down policy boundary conditions covering technological intensity, destination types, institutional distance, and investment margin, supplying micro evidence for differentiated regional overseas IP public service optimization.