ABSTRACT
This study investigates the impact of foreign patents on knowledge spillovers to domestic firms in India using patent citation data. It analyses a panel dataset of 250 Indian firms and 5309 patents granted by the U.S. Patent Office to Indian assignees between 1990 and 2016. The findings reveal a positive relationship between foreign patenting and knowledge flows from foreign patents to domestic firms. However, the study does not find any significant influence of TRIPS-related policy changes in 1998, 2002, and 2005 on knowledge spillovers. Additionally, firm-level characteristics such as size and patent stocks play a significant role in knowledge spillovers. The study emphasise that policy changes alone may not be sufficient to promote knowledge spillovers and underscores the importance of fostering innovation, enhancing the absorptive capacity of Indian firms, and raising awareness about the benefits of utilising patent documents for knowledge acquisition.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 A series of amendments were made in the Patents Act of 1970 to comply with TRIPs agreement. Patents (Amendment) Act, 1999 that replaced the 1999 ordinance was brought into force retrospectively from 1 January 1995. Further changes were introduced in 2002 and 2005, See, (Sharma et al. Citation2018) for further details.
2 In the study, non-residential patent and foreign patenting are used interchangeably.
3 A firm’s decision to apply for a patent in any foreign patent office depends upon the potential demand and quality of the invention (Beneito, Rochina-Barrachina, and Sanchis Citation2017). Additionally, firms patent in foreign countries to prevent competitors from imitating (Cohen, Nelson, and Walsh Citation2000; Kingston Citation2001; Levin Citation1988; Walsh, Arora, and Cohen Citation2003) and to facilitate inter-firm cross licensing (Gambardella, Giuri, and Luzzi Citation2007).
4 Collaboration could be in the form of joint patent creation (Danish and Sharma Citation2023).
5 PatSeer is a private patent database owned by Gridlogics Technologies Pvt Ltd. The data base is being used in academic research work in India. We have verified the authenticity of PatSeer database with Indian Patent Office, US Patent office and World Intellectual Property Organization database.
6 The firm level information of remaining patent’s assignee is not available on CMIE database hence, removed from main analysis.
7 The classification of firm’s ownership is based on their headquarter. If the patent is assigned to a firm which has headquarter in India it is considered as the Indian firm otherwise foreign.
8 Total citations are 62,568.
9 A patent family is ‘a set of patents taken in various countries to protect a single invention’, (Eupoean Patent Office Citation2018).