Abstract
This study examines the factors stimulating the cross-country patenting activity post the Trade-Related Intellectual Property Rights (TRIPS) agreement in 1995. In particular, we investigate the role of technological capabilities and technological gap between the home and host country in determining bilateral foreign patenting. We adopt an augmented gravity model approach for sample of 36 countries from 2001 to 2015. Using a negative binomial regression model, we find that technological capabilities of home countries positively influence their patenting activities in other countries. Further, the high technological gap between the host and the home countries reduces the inflow of patents to the destination countries.
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Notes
Park’s Index of PRs shows increased values in 2005 for developing countries such as China, India, Malaysia, Mexico, South Africa etc.
The terms cross country patenting, foreign patenting and international patenting has been used interchangeably in this paper.
We include countries having minimum 1 percent share in total patent applications filed by non-residents in United States Patent and Trademark Office (USPTO) in the year 2015. The share was calculated based on WIPO statistics database of US as filing office and other countries as origin. We get total 36 countries including 8 middle income countries and 28 high income countries. USPTO is the highest non-resident patent application receiving office.
Difference in technological progress between two countries is considered as technological gap between two countries in the study. A study by Geronikolaou and Mourmouris (2015) suggests total number of patent applications (yearly) by the inventors of a country as one of the measures to estimate technological progress.
Kim (1997) defines technological capability as “the ability to make effective use of technological knowledge in efforts to assimilate, use, adapt and change existing technologies.” (page 4). Capability can be grouped under three broad headings, such as physical investment, human capital, and the technological effort of a country.
Here “host country” referred to a foreign patent receiving country or destination country for patent application.
The Patent Cooperation Treaty (PCT) 1970 assists applicants in seeking patent protection internationally for their inventions, helps patent offices with their patent granting decisions, and facilitates public access to a wealth of technical information relating to those inventions. By filing one international patent application under the PCT, applicants can simultaneously seek protection for an invention in many countries. It may generally be filed with the national patent office of the contracting state of which the applicant is a national or resident. The PCT presently has 153 member states/countries.
Here “home country” referred to an innovating country or source country of a patent application. In other words, it is the country of origin of a patent application.
International business literature establishes that R&D intensive multinational firms protect their innovations not only in the home countries but also in the foreign countries through patenting to ensure the returns from R&D investments by commercializing such inventions worldwide (Licht and Zoz 2000; Nerkar and Shane 2007). Imitation threat, product market competition and innovation quality are key influencers in the firms’ decision about international patenting (Grupp and Schmoch 1999; Huang and Jacob 2014; Beneito et al. 2018).
National innovation systems define as “the network of institutions in the public- and private-sectors whose activities and interactions initiate, import, modify and diffuse new technologies” (Freeman 1987; Page. 1).
Next subsection elaborates the terms technological capabilities and technological gap along with their operationalization.
TCs measurement related literature and concerns are discussed below.
36 countries are included in this study based on data availability. The regression has been estimated for 1260 (36*35) country pairs showing bilateral patenting flows.
Middle-income economies are those whose GNI per capita is more than $1,026 but less than $12,475 and high-income economies are those whose GNI per capita is $12,476 or more (World Bank 2016).
Index of patent rights by Ginarte and Park (1997) and Park (2008) is available for 122 countries (available on Prof. Walter G Park’s website) from 1960 to 2015 quinquennially. The index provides a score that reflects a given country’s overall level of patent rights and restrictions at a given point in time. The index ranges from 0 (no patent system) to 5 (strongest level of protection).
We are thankful to the anonymous referee for this suggestion.
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Appendices
Appendix 1
List of Countries | |
|---|---|
S. No. | Country Name |
1. | Australia |
2. | Austria |
3. | Belgium |
4. | Brazil |
5. | Canada |
6. | China |
7. | China, Hong Kong SAR |
8. | Czech Republic |
9. | Denmark |
10. | Finland |
11. | France |
12. | Germany |
13. | Greece |
14. | Hungary |
15. | India |
16. | Ireland |
17. | Israel |
18. | Italy |
19. | Japan |
20. | Malaysia |
21. | Mexico |
22. | Netherlands |
23. | New Zealand |
24. | Norway |
25. | Poland |
26. | Republic of Korea |
27. | Russian Federation |
28. | Saudi Arabia |
29. | Singapore |
30. | South Africa |
31. | Spain |
32. | Sweden |
33. | Switzerland |
34. | Turkey |
35. | United Kingdom |
36. | United States of America |
Note: Selection of the countries is based on high patenting countries in USPTO in 2015 conditioned on patent data availability in WIPO data base.
Income wise classification of the countries | |
|---|---|
S. No. | High Income Countries |
1. | Australia |
2. | Austria |
3. | Belgium |
4. | Canada |
5. | China, Hong Kong SAR |
6. | Czech Republic |
7. | Denmark |
8. | Finland |
9. | France |
10. | Germany |
11. | Greece |
12. | Hungary |
13. | Ireland |
14. | Israel |
15. | Italy |
16. | Japan |
17. | Netherlands |
18. | New Zealand |
19. | Norway |
20. | Poland |
21. | Republic of Korea |
22. | Saudi Arabia |
23. | Singapore |
24. | Spain |
25. | Sweden |
26. | Switzerland |
27. | United Kingdom |
28. | United States of America |
S. No. | Middle Income Countries |
1. | Brazil |
2. | China |
3. | India |
4. | Malaysia |
5. | Mexico |
6. | Russian Federation |
7. | South Africa |
8. | Turkey |
Source: World Bank (2016)
Appendix 2
Technology Index | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Country | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
Australia | 0.20 | 0.22 | 0.36 | 0.41 | 0.63 | 0.69 | 0.79 | 0.79 | 0.80 | 0.80 | 0.76 | 0.77 | 0.86 | 0.66 | 0.68 |
Austria | 0.05 | 0.13 | 0.31 | 0.38 | 0.49 | 0.45 | 0.54 | 0.57 | 0.67 | 0.79 | 0.62 | 0.78 | 0.75 | 0.73 | 0.78 |
Belgium | 0.22 | 0.18 | 0.13 | 0.15 | 0.20 | 0.20 | 0.21 | 0.33 | 0.48 | 0.48 | 0.56 | 0.77 | 0.78 | 0.88 | 0.98 |
Brazil | 0.23 | 0.18 | 0.37 | 0.39 | 0.46 | 0.43 | 0.55 | 0.61 | 0.67 | 0.66 | 0.72 | 0.74 | 0.81 | 0.71 | 0.76 |
Canada | 0.37 | 0.34 | 0.39 | 0.67 | 0.72 | 0.76 | 0.74 | 0.75 | 0.79 | 0.70 | 0.70 | 0.66 | 0.52 | 0.39 | 0.39 |
China | 0.01 | 0.05 | 0.11 | 0.22 | 0.41 | 0.47 | 0.54 | 0.64 | 0.58 | 0.62 | 0.73 | 0.80 | 0.88 | 0.88 | 0.93 |
China, Hong Kong SAR | 0.00 | 0.21 | 0.34 | 0.47 | 0.69 | 0.75 | 0.67 | 0.67 | 0.73 | 0.66 | 0.76 | 0.76 | 0.91 | 0.84 | 0.94 |
Czech Republic | 0.07 | 0.03 | 0.15 | 0.14 | 0.18 | 0.25 | 0.34 | 0.34 | 0.47 | 0.58 | 0.60 | 0.78 | 0.94 | 0.89 | 0.82 |
Denmark | 0.23 | 0.36 | 0.36 | 0.40 | 0.32 | 0.25 | 0.37 | 0.52 | 0.67 | 0.68 | 0.73 | 0.73 | 0.70 | 0.70 | 0.73 |
Finland | 0.42 | 0.43 | 0.53 | 0.57 | 0.50 | 0.50 | 0.39 | 0.53 | 0.72 | 0.68 | 0.58 | 0.57 | 0.49 | 0.39 | 0.24 |
France | 0.37 | 0.41 | 0.35 | 0.46 | 0.45 | 0.47 | 0.44 | 0.52 | 0.74 | 0.79 | 0.75 | 0.81 | 0.85 | 0.79 | 0.72 |
Germany | 0.25 | 0.21 | 0.27 | 0.31 | 0.39 | 0.36 | 0.35 | 0.49 | 0.71 | 0.65 | 0.68 | 0.76 | 0.74 | 0.74 | 0.70 |
Greece | 0.05 | 0.04 | 0.06 | 0.06 | 0.22 | 0.26 | 0.30 | 0.39 | 0.44 | 0.48 | 0.63 | 0.66 | 0.84 | 0.83 | 0.90 |
Hungary | 0.29 | 0.28 | 0.17 | 0.15 | 0.24 | 0.27 | 0.29 | 0.38 | 0.55 | 0.50 | 0.62 | 0.72 | 0.74 | 0.67 | 0.64 |
India | 0.10 | 0.12 | 0.16 | 0.23 | 0.34 | 0.39 | 0.43 | 0.51 | 0.53 | 0.65 | 0.71 | 0.74 | 0.54 | 0.71 | 0.66 |
Ireland | 0.25 | 0.22 | 0.24 | 0.30 | 0.35 | 0.35 | 0.39 | 0.55 | 0.71 | 0.68 | 0.65 | 0.66 | 0.63 | 0.64 | 0.57 |
Israel | 0.46 | 0.48 | 0.41 | 0.48 | 0.56 | 0.50 | 0.64 | 0.55 | 0.40 | 0.24 | 0.22 | 0.54 | 0.45 | 0.46 | 0.46 |
Italy | 0.25 | 0.31 | 0.30 | 0.29 | 0.34 | 0.37 | 0.42 | 0.35 | 0.63 | 0.61 | 0.59 | 0.68 | 0.77 | 0.89 | 0.85 |
Japan | 0.39 | 0.25 | 0.38 | 0.44 | 0.74 | 0.77 | 0.72 | 0.60 | 0.61 | 0.47 | 0.55 | 0.45 | 0.50 | 0.64 | 0.45 |
Malaysia | 0.02 | 0.04 | 0.03 | 0.12 | 0.10 | 0.11 | 0.15 | 0.32 | 0.63 | 0.71 | 0.72 | 0.76 | 0.78 | 0.88 | 0.88 |
Mexico | 0.03 | 0.20 | 0.24 | 0.38 | 0.48 | 0.35 | 0.44 | 0.53 | 0.76 | 0.75 | 0.77 | 0.68 | 0.68 | 0.71 | 0.74 |
Netherlands | 0.27 | 0.25 | 0.36 | 0.37 | 0.40 | 0.35 | 0.21 | 0.32 | 0.50 | 0.54 | 0.74 | 0.81 | 0.82 | 0.81 | 0.75 |
New Zealand | 0.27 | 0.25 | 0.38 | 0.30 | 0.40 | 0.46 | 0.53 | 0.45 | 0.75 | 0.72 | 0.74 | 0.60 | 0.65 | 0.62 | 0.50 |
Norway | 0.31 | 0.32 | 0.30 | 0.26 | 0.28 | 0.29 | 0.46 | 0.45 | 0.69 | 0.56 | 0.59 | 0.53 | 0.58 | 0.61 | 0.77 |
Poland | 0.15 | 0.18 | 0.18 | 0.26 | 0.24 | 0.22 | 0.22 | 0.27 | 0.35 | 0.45 | 0.54 | 0.75 | 0.79 | 0.81 | 0.94 |
Republic of Korea | 0.03 | 0.01 | 0.15 | 0.29 | 0.45 | 0.52 | 0.57 | 0.58 | 0.62 | 0.66 | 0.75 | 0.87 | 0.93 | 0.95 | 0.94 |
Russian Federation | 0.90 | 0.82 | 0.73 | 0.48 | 0.35 | 0.32 | 0.32 | 0.15 | 0.37 | 0.29 | 0.17 | 0.16 | 0.18 | 0.16 | 0.31 |
Saudi Arabia | 0.02 | 0.04 | 0.03 | 0.03 | 0.05 | 0.05 | 0.07 | 0.07 | 0.14 | 0.61 | 0.71 | 0.74 | 0.87 | 0.93 | 0.93 |
Singapore | 0.09 | 0.24 | 0.28 | 0.47 | 0.42 | 0.38 | 0.43 | 0.64 | 0.49 | 0.43 | 0.54 | 0.49 | 0.48 | 0.59 | 0.63 |
South Africa | 0.27 | 0.29 | 0.28 | 0.51 | 0.55 | 0.59 | 0.58 | 0.57 | 0.55 | 0.39 | 0.41 | 0.44 | 0.52 | 0.55 | 0.57 |
Spain | 0.07 | 0.19 | 0.26 | 0.33 | 0.45 | 0.52 | 0.61 | 0.80 | 0.91 | 0.91 | 0.87 | 0.85 | 0.76 | 0.70 | 0.59 |
Sweden | 0.60 | 0.36 | 0.36 | 0.29 | 0.42 | 0.40 | 0.13 | 0.25 | 0.32 | 0.20 | 0.19 | 0.33 | 0.54 | 0.44 | 0.42 |
Switzerland | 0.29 | 0.28 | 0.31 | 0.31 | 0.30 | 0.33 | 0.25 | 0.25 | 0.34 | 0.31 | 0.32 | 0.77 | 0.78 | 0.74 | 0.72 |
Turkey | 0.03 | 0.08 | 0.14 | 0.21 | 0.30 | 0.32 | 0.49 | 0.54 | 0.74 | 0.77 | 0.81 | 0.89 | 0.89 | 0.91 | 0.90 |
United Kingdom | 0.39 | 0.42 | 0.38 | 0.33 | 0.42 | 0.47 | 0.54 | 0.54 | 0.74 | 0.66 | 0.65 | 0.54 | 0.62 | 0.64 | 0.67 |
United States of America | 0.13 | 0.14 | 0.23 | 0.20 | 0.30 | 0.37 | 0.48 | 0.62 | 0.77 | 0.67 | 0.78 | 0.77 | 0.86 | 0.84 | 0.82 |
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Sharma, A., Sharma, R. & Panda, S. The role of technological capabilities and gap in the cross-country patenting: an empirical investigation. Int Econ Econ Policy 19, 1–27 (2022). https://doi.org/10.1007/s10368-021-00506-5
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DOI: https://doi.org/10.1007/s10368-021-00506-5