Home or next door? Patenting by European food and beverage multinationals

We study the location of the inventive activity of 59 major European food and beverage multinationals and their 8432 subsidiaries worldwide, by analysing the geographical distribution of the inventors listed in the European Patent Office (EPO) applications, US Patent and Trademark Office (USPTO) patents and triadic, international and Patent Cooperation Treaty (PCT) patent families of the companies filed between 1978 and the early 2000s. The sampled companies tend to locate their R&D activities in the home country. EU-based companies, more specifically, deploy an intra-regional strategy in EU countries, especially with regard to the inventions most closely related to their core businesses (food), for which, however, they do not display a home-country preference. Inventions related to non-core business tend to be produced in extra-regional locations.     

R&D internationalisation patterns in the global pharmaceutical industry: evidence from a network analytic perspective

This study adopts a Social Network Analysis (SNA) perspective to investigate global R&D internationalisation patterns of the pharmaceutical industry. We use co-inventorships identified in pharmaceutical patents granted by the US Patent and Trademark Office (USPTO) between 1996 and 2013, giving rise to an international collaboration network by drawing a cross-country link when a patent lists at least two inventors located in different countries. We describe changing R&D internationalisation patterns by exploring network structures as a whole as well as the changing role of different countries. The results show that R&D internationalisation indeed has gained momentum in pharmaceutical innovation, in particular after the year 2006. The network has developed from a mono-centric, star-like network – with the USA constituting the only hub – to a more distributed and dense network. The relative decline of the USA has not taken place at the expense of emerging economies but at the expense of European countries.     

Inventing together: exploring the nature of international knowledge spillovers in Latin America

This paper studies the nature, sources and determinants of international patenting activity in Latin American countries (LACs) and examines the extent to which LACs benefit from R&D that is performed in the G-5 countries (France, Germany, Japan, the United Kingdom, and the United States). By using patents and patent citations from the United States Patent and Trademark Office, we trace sectoral knowledge flows from G-5 countries to LACs. We study the impact of three channels of knowledge flows: foreign R&D, patent citation-related spillovers, and face-to-face contact spillovers. Our results, based on data for Argentina, Brazil, Chile, Colombia and Mexico, suggest that international knowledge spillovers from the G-5 countries were a significant determinant of inventive activity during the period 1988–2003. We find that the stock of ideas produced in the USA has a strong impact on the international patenting activity of these countries. Moreover, controlling for US-driven R&D effects, bilateral patent citations and face-to-face relationships between inventors are both important additional mechanisms of knowledge transmission. Some of our results suggest that the latter mechanism is more important than the former.     

Private value of European patents

I examine the joint patent designation-renewal behavior of the European Patent Office (EPO) patent applicants during 1978-1996, using both nonparametric techniques and a parametric model. The European patents granted through the EPO are substantially more valuable than those through the national route. Value distribution of patents is highly skewed, and even more so for the EPO patent families. The value of patent rights increases with the economic size of the country and exhibits modestly increasing returns to scale. Model estimation also reveals significant institutional differences across EPO member countries in patent protection.     

The pattern of international patenting and technology diffusion

The article focuses on the impact of R&D expenditure on labour productivity using international patent applications as a technology diffusion indicator. Considering the relationship between research and productivity, the pattern of international patenting reflects the channel between the source and the destination of transferred technology. Accounting for nonstationarity and cointegration, I find that patent-related foreign R&D spillovers are present for a panel of 18 OECD countries. Moreover, nonG7 OECD countries benefit more from foreign rather than domestic R&D activities. Estimates also show that there is no significant spillover effect from bilateral trade, but confirm the impact of FDI on domestic labour productivity.     

Knowledge technological proximity: evidence from US and European patents

The purpose of this paper is to explore the correlation between the technological proximity measures in three areas: USA, Japan and the Europe. In each economic area, we use information from two international patent systems to construct the technological proximity for 240 large international firms. In particular, we select firms’ patents from United States Patent and Trademarks Office data and European Patent Office data. In order to compute the technological proximity, we follow the methodology developed by Jaffe [1986. “Technological Opportunity and Spillovers of R&D: Evidence from Firms’ Patents, Profits and Market Value.” American Economic Review 76 (5): 984–1001], where a technological vector is based on the distribution of patents of each firm across technology classes. Since the Jaffe distance assumes that spillovers only occur within the same technology class, but rules out spillovers between different classes, we develop also a distance measure which exploits the Mahalanobis norm to identify the distance between different technology classes based on the frequency that patents are taken out in different classes by the same firm. The contribution to the existing literature is to investigate the robustness of the technological proximity measure and the extent to which it may be affected by patent system features.     

International R&D spillovers and institutions

The empirical analysis in “International R&D Spillovers” [Coe, D., Helpman, E., 1995. International R&D Spillovers. European Economic Review, 39, 859-887] is first revisited on an expanded data set that we have constructed for the purpose of this study. The new estimates confirm the key results reported in Coe and Helpman about the impact of domestic and foreign R&D capital stocks on TFP. In addition, we show that domestic and foreign R&D capital stocks have measurable impacts on TFP even after controlling for the impact of human capital. Furthermore, we extend the analysis to include institutional variables. Our results suggest that institutional differences are important determinants of TFP and that they impact the degree of R&D spillovers. Countries where the ease of doing business and the quality of tertiary education systems are relatively high tend to benefit more from their own R&D efforts, from international R&D spillovers, and from human capital formation. Strong patent protection is associated with higher levels of total factor productivity, higher returns to domestic R&D, and larger international R&D spillovers. Finally, countries whose legal systems are based on French and, to a lesser extent, Scandinavian law benefit less from their own and foreign R&D capital than countries whose legal origins are based on English or German law.     

Entry of foreign firms and the R&D behaviour: a panel data study of domestic and foreign firms in China's manufacturing sector

Rapid globalization has resulted in increased competitive pressures. The entry of foreign firms in a host economy increases the level of competition faced by not only the domestic firms but also the existing foreign firms. We argue that domestic firms, especially in developing countries, respond to this situation by increasing their research and development (R&D) spending, whereas the foreign firms decrease their R&D spending. By making use of firm-level panel data from China's manufacturing sector, over the period 2005–2007, this paper investigates the impact of the entry of foreign firms on R&D behaviour of domestic and foreign firms. Empirical analysis, based on Tobit and Instrumental Variables Tobit regression, reveals that foreign entry increases the R&D intensity of domestic firms but its impact on R&D intensity of foreign firms is negative. The estimated results are found to be robust across balanced and unbalanced panels.     

Inter-Firm Technological Cooperation: Effects Of Absorptive Capacity,Firm-Size And Specialization

This paper aims to add evidence on the role played by firms' technological competencies in the determination of their intensity of cooperation with other firms. Using a database composed by patents jointly filcd by two or more firms in the European Patent Office, the paper confronts the hypotheses of complementary or substitutive character of technological cooperation in relation to intra-mural R&D. The results suggest that more technologically and productive specialized firms are more likely to cooperate and find no support for the hypothesis that greater level of R&D expenditure will induce greater reliance on technological cooperation. It is also suggested that firms cooperate with partners that hold cotilplenientary competencies.     

Technology spillover effects and economic integration: evidence from integrating EU countries

The article uses time series for the period 1981–2008 to estimate the impact of foreign technology spillover effects on Greece, Ireland, Portugal and Spain, representing the integrating European Union (EU) countries. I restrict technology diffusion to EU-12 countries and compare the results to unrestricted technology diffusion from a sample of 32 OECD countries. Accounting for nonstationarity and co-integration, the dynamic OLS estimator is used to estimate the impact of foreign R&D stock on labour productivity, taking into account patent-, trade- and FDI-related technology diffusion channels. I find empirical evidence for trade-related foreign technology spillover effects for Greece and Ireland if technology diffusion is unrestricted. Restricting technology diffusion to EU-12 countries, there are significant foreign technology spillover effects from European integration for Portugal (patent related) and Spain (trade and FDI related). Moreover, the domestic R&D stock and education are significant drivers for labour productivity in integrating EU countries. The empirical results are robust for different regression specifications and sources of technology diffusion.     

Patents and R&D expenditure effects on equity returns in pharmaceutical industry

As costs of pharmaceutical R&D soar and productivity falls, the role of research pipelines in firm valuations is changing. To date, surprisingly little work has been published on the effects of R&D pipeline performance on equity returns, while controlling for coincident factors, such as legacy patents and presence of blockbuster drugs in production. Using 1996–2013 data for nine largest pharmaceutical companies in the world, this article assesses the role of the above factors on returns to pharmaceutical companies equity. We show significant positive link between changes in the number of blockbusters on patent six months prior and returns in excess of pharmaceutical equity index. The number of patents granted by United States Patent and Trademark Office in a quarter is also a significant factor. On the other hand, we find that increases in R&D expenditure in large-cap pharmaceutical companies are viewed negatively by investors in the short term.     

On the impact of innovation and inequality in economic growth

We present robust results on the empirical relationship among income inequality, innovation, and economic growth for a panel dataset of 74 countries over the period 1996–2014. We estimate pairwise causality tests to show that there is bidirectional causality between GDP per capita and R&D, while R&D causes the Gini index of income inequality, and it causes human capital. Allowing coefficients to be different across cross-sections of countries, we get in any case a pairwise bi-directionality. By dynamic panel data estimations, when regressing R&D on GDP per capita, we obtain a threshold value of 0.16% of R&D such that for values above it there is economic growth. While regressing R&D on the Gini index, we get a threshold of 0.10% of R&D above which, the income distribution begins to improve. Finally, we estimate a growth equation that depends on R&D, income inequality, and physical capital. We obtain two thresholds, one of 38.79 for the Gini (above which the economic growth decreases), and one of 0.06% for R&D such that above it, economic growth is rising.     

Transfer of Technology to Canadian Manufacturing Industries Through Patents

This paper examines the determinants of foreign patent activity in the Canadian manufacturing sector at the industry level. Since foreign patenting is one of the channels of technology transfer to a country, this study could also show the transfer of foreign technology into Canadian industries measured by foreign patent activity. The paper suggests that the patent activity of foreign countries is the most important factor for receiving foreign patents in Canada. Moreover, imports and foreign direct investments are important vehicles this context. The distance between countries has a negative impact on receiving foreign patents. The impacts of R&D intensity and human capital on receiving foreign patents are mixed and insignificant, but industries with a higher R&D intensity are better recipients of foreign patents.     

THEY DON'T INVENT THEM LIKE THEY USED TO: AN EXAMINATION OF ENERGY PATENT CITATIONS OVER TIME

This article uses patent citation data to study flows of knowledge across time and across institutions in the field of energy research. Popp [2002, Induced Innovation and Energy Prices. American Economic Review, 92(1), 160–180.] finds that the level of energy-saving research and development (R&D) depends not only on energy prices, but also on the quality of the accumulated knowledge available to inventors. Patent citations are used to represent this quality. This article explores the pattern of citations in these fields more carefully. Evidence for diminishing returns to research inputs, both across time and within a given year is found. To check whether government R&D can help alleviate potential diminishing returns, special attention is paid to citations to government patents. The government patents filed in or after 1981 are more likely to be cited. More importantly, descendants of these government patents are 30% more likely to be cited by subsequent patents. Earlier government research was more applied in nature and is not cited more frequently.     

Types of patents and driving forces behind the patent growth in China

As a developing economy, China's unprecedented patenting surge is puzzling. We study China's patent surge and its driving forces using a novel and comprehensive merged dataset on patent applications filed by Chinese firms. We find that R&D investment, FDI, and patent subsidy have different effects on different types of patents. First, R&D investment has a positive and significant impact on patenting activities for all types of patents under different model specifications. Second, the stimulating effect of foreign direct investment on patent applications is only robust for utility model patents and design patents. Third, the patent subsidy only has a positive impact on design patents. The results imply that FDI and patent subsidy may disproportionately spur low-quality patents.     

Does R&D,human capital and FDI matter for TFP in OECD countries?

ABSTRACT

This study investigates the interplay between research and development (R&D), human capital (HC), foreign direct investment (FDI) and total factor productivity (TFP) in OECD countries. We divide the sample into two sub-groups; the European and the non-European states so as to account for underlying country heterogeneity. The analysis follows a panel data approach over the period 1995–2015, taking into account the modelling on non-stationarity, long-run relationships and short-run dynamics with a panel VAR. Both R&D and HC have a positive effect on TFP, whilst FDI has a positive and significant effect only in the case of non-European countries. Moreover, the contribution of R&D is higher than that of HC and FDI in all cases. Thus, based on these findings, policymakers should design and implement policies to increase resources invested in R&D, with a consistent ongoing spending review, to attract foreign direct investment, especially for the majority of the European and some of the non-European countries and to improve education system on a more productive innovation and research base.     

Strategic technology editing of the patent stage: lesson from a case of inkjet printer development

Patents are conventionally regarded as representing post-procurement of rights based on results of research and development (R&D). Patents can also be regarded as factors promoting R&D itself. In this study, the author examines the strategic meaning of patents in R&D through analyses of the R&D processes at Canon Inc., which is widely considered to submit patents strategically. The author identified characteristic behaviour related to patent acquisition in the R&D of inkjet printers. Canon constructed a strong patent group precisely by editing patents submitted earlier. Characteristic patent submissions were also identified: they elevated the obtained R&D results to higher concepts as milestones of R&D. These findings are discussed from the viewpoint of the meaning of patents for R&D and the possibility of effective R&D at the patent stage.     

The Causality between R&D and Productivity in Manufacturing: An international disaggregate panel data study

This study analyses the causality between productivity and domestic and foreign R&D on the basis of panel data with respect to 22 manufacturing sectors in 14 OECD countries during the period 1972-94. A unit root analysis shows that the relation between the log of total factor productivity (TFP) and the logs of domestic and foreign R&D is cointegrated. Causality tests are performed on corresponding dynamic VAR and error correction augmented VAR models, estimated both on the total panel and on 22 sub-panels, sector by sector. Their results show that, although there are feedbacks, both on average and in a clear majority of sectors the causation runs mainly from the R&D variables to TFP rather than the other way round. This causation is, moreover, shown to be, in the first place, long-run in nature. It is concluded that, when considered in conjunction, these results suggest an essentially supply-type rather than demand-pull kind of interpretation of the cointegrating relation between TFP and R&D.     

R&D spending in the high-tech sector and economic growth

The present paper provides new estimates of the impact of investment in R&D on long-term economic growth. In particular, we estimate a dynamic empirical growth model using panel data for OECD countries from 1970 to 2004. This study is the first to investigate whether the specialization of R&D activities (i.e. share of R&D investment in the high-tech sector) has an additional effect on GDP per working age population. Using a system GMM estimator in order to control for endogeneity, we find that both the ratio of business enterprises’ R&D expenditures to GDP and the share of R&D investment in the high-tech sector have strong positive effects on GDP per capita and GDP per hour worked in the long term.     

International Knowledge Diffusion and Home‐bias Effect: Do USPTO and EPO Patent Citations Tell the Same Story?*

This paper estimates the international diffusion of technical knowledge using patent citations. We control for self‐citations and for procedural differences between patent offices using equivalent patents. We find that (1) there are clear biases in patent examination processes that generate citations in the two offices; (2) at the EPO there is a strong localization effect at the country level, and the size is comparable to that found at the USPTO; (3) technological fields have different properties of diffusion in the two patent offices that do not depend on a patent office bias; (4) using EPO data, the US is not the leading country in terms of citations made and received, as occurs at the USPTO.