Firm patenting and types of innovation. An empirical investigation on patenting determinants in developing countries

ABSTRACT

The literature has accumulated numerous pieces of evidence and trends as far as developed countries’ firm patenting is concerned. To date only a small amount of information concerning developing countries’ firm patenting is available. This paper contributes to the literature by accounting for the determinants of firm patenting in developing countries. The core assumption of this paper is that the occurrence of firm patenting is positively related to innovation strategies. As a result, we place the emphasis on the diverse ways to innovate and we identify their effects on a firm’s probability to patent. Our findings indicate that despite the weaknesses of the patenting systems in developing countries, the probability to patent an innovation occurs when it is new to the market type, whether it is a product or a process (after controlling for many other effects).

La littérature a accumulé de nombreux résultats en ce qui concerne le dépôt de brevet dans les pays développés. En revanche, peu d’informations sont disponibles sur les brevets des firmes des pays en développement. La présente étude comble cette lacune. Ce papier contribue à la littérature en rendant compte des déterminants du comportement en matière de brevets des firmes des pays en développement. L’hypothèse de base de ce papier est qu’il existe une relation positive entre le dépôt de brevet par une entreprise et sa stratégie d’innovation. En conséquence, nous mettons l'accent sur les différentes façons d'innover et prenons en compte ses effets sur la probabilité de déposer des brevets. Nos résultats indiquent qu'en dépit des faiblesses des systèmes de brevet des pays en développement, la probabilité de breveter une innovation se produit lorsqu'elle est de « type nouvelle pour le marché », qu'il s'agisse d'un produit ou d'un procédé (après contrôle d’autres variables).

KEYWORDS:

• Patent
• new to the market innovation
• new to the firm innovation
• product/process innovation
• developing economies

JEL CODES:

• O31
• O32
• O33
• O34

MOTS ClÉS:

• Brevet
• innovation nouvelle pour le marché
• innovation nouvelle pour la firme
• produit/process innovation
• pays en développement

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Patent applications provide information (signals) on the intentions of firms to effectively protect innovations (Antonelli 2007). It has been shown that patenting aims to also preserve a firm’s freedom to operate (Hall and Ziedonis 2001; Hikkerova, Kammoun, and Lantz 2014; Le Bas and Pénin 2015; Reitzig 2004).

2 Meaning imitation of Northern firm technologies recedes.

3 Africa, Latin America, and the Caribbean represent 2.3% of the overall filings (WIPO statistics data, 2018).

4 https://en.wikipedia.org/wiki/Inventive_step_and_non-obviousness#European_Patent_Convention_(EPC).

5 The Oslo Manual (OECD) is the source of guidelines for the collection and use of data on innovation activities their measurement and use.

6 The list of countries surveyed is given in Table A1 in the Appendix. We followed Isham et al. (2005) and use the share of oil & natural gas rents over GDP (more than 5.5%) to distinguish between the rentier group and the diversified group.

7 Brazil has been excluded due to the fact that questions on the innovations were missing.

8 For more details on sampling methodology and data collected see: http://www.enterprisesurveys.org/.

9 The data were collected in 2010 for all countries.

10 For instance, a superficial and a very approximative comparison of the percentage of innovators and patent applicants in our sample with similar figures presented in Hall et al. (2013) for the UK seems too optimistic for our sample of developing countries of South and Central America. It suggests that without a strict equivalence of methodologies based on identical definitions and survey procedures a meaningful international comparison may not be possible.

11 Here a limitation of our data must be underlined. Patent behaviour is assessed at the global level of the firm and not for each type of innovation. Let us distinguish, for example, two types of innovators: simple or complex (Le Bas and Poussing 2014; Tavassoli and Karlsson 2015; Karlsson and Tavassoli 2016). A single innovator innovates only in one direction: product or process, the second in two directions. Let us assume a complex innovator that patents a part of its product innovations but none of its process innovations. Because it innovates by definition in its processes it will be present in the population of process innovators and associated with a firm that files patents.

12 Manufacturing industries are classified according to their technological intensity using the typology of activities in the 2010 ISIC Revision 3 set out by OECD (2010). We use two categories for technological sectoral intensity: low-technology and medium-high technology (Machinery & equipment, Chemicals, and Electronics).

13 The Oslo Manual (OECD) is the source of guidelines for the collection and use of data on innovation activities their measurement and use.

14 The utility model could be relevant in this context (Kim et al. 2012).

15 Knowing that studies show differences in the choice of appropriability methods across the manufacturing and service sector (Amara, Landry, and Traore 2008; Blind et al. 2006), and within the manufacturing sector (Arundel 2001; Blind et al. 2006; Hanel 2008 and Neuhäusler 2012) among others.