PATENTS,R&D,AND TECHNOLOGICAL SPILLOVERS AT THE FIRM LEVEL: SOME EVIDENCE FROM ECONOMETRIC COUNT MODELS FOR PANEL DATA

This paper analyses the relationship between the main determinants of technological activity and patent applications. To this end, an original panel of 181 international manufacturing firms investing substantial amounts in R&D during the late 1980s has been constructed. The number of patent applications by firms is explained by current and lagged levels of R&D expenditures and technological spillovers. Technological and geographical opportunities are also taken into account as additional determinants. In order to examine this relationship, several econometric models for count panel data are estimated. These models deal with the discrete nature of patents and firm specific unobservables arising from the panel data context. The main findings of the paper are first, a high sensitivity of results to the specification of patent distribution. Second, the estimates of the preferred GMM panel data method suggest decreasing returns to scale in technological activity and finally a positive impact of technological spillovers on firm's own innovation. © 1997 John Wiley & Sons, Ltd.