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Does Patent Performance Promote Relative Technological Performance in Countries Bordering the Mediterranean?

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Abstract

In the present paper, we explore the relationship between patent performance and relative technological performance. A review of the theoretical and empirical literature shows that patenting is one of the major drivers for enhancing countries’ relative technological performance. Focusing on PCT patent applications for a sample of 16 Mediterranean countries over the period 1995 to 2010, we develop a dynamic model in which countries’ relative technological performance is depending on the capacity of innovative actors and ‟knowledge infrastructure” to exploit internal technological capabilities and to explore external sources of technological knowledge by patents (ambidexterity). The results of our estimations show that Mediterranean countries’ patent performances significantly explain their relative technological performances. Estimations provide also evidence that for this group of countries, relative technological performance depends on technological knowledge absorption capacities.

Résumé

Dans le présent papier, nous explorons la relation entre performance en matière de brevets et performance technologique relative. Une revue de la littérature théorique et empirique montre que l’activité de brevet est à l’origine de toute performance technologique relative. À partir des demandes de brevets PCT de 16 pays riverains du bassin de la Méditerranée de la période 1995–2010, nous avons développé un modèle dynamique où la performance technologique relative spécifique à un pays est dépendante de la capacité de ses acteurs innovants et de ses “infrastructures de connaissances” à exploiter les capacités technologiques internes et à explorer les sources externes de connaissances technologiques par les brevets (Ambidextrie). Les résultats de nos estimations ont montré que la performance en matière de brevets des pays riverains du basin de la Méditerranée explique significativement leurs performances technologiques relatives. Les estimations ont montré aussi que pour ce groupe de pays, la performance technologique relative est dépendente des capacités d’absorption des connaissances technologiques.

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Notes

  1. A patent is the legal and official form of technological diffusion. It is also regarded as an incentive to innovate in North countries and a protective force against imitation in South countries (Trabelsi, 2015).

  2. The TRIPs Agreement requires all WTO member states to establish minimum standards of legal protection and enforcement for a number of different forms of intellectual property rights (IPRs).

  3. In this study, absolute and relative aspects of patent performance are considered. The absolute aspect shows the potential that has a country in domestic patenting activities. However, the relative concept demonstrates how qualified a country is in comparison to other countries.

  4. By filing through the Patent Cooperation Treaty (PCT) process, inventors seek patent protection for an invention simultaneously in every country that is a member to the Treaty (OECD 2013). The advantage of the PCT, from a statistical perspective, is that they are far less biased, in terms of country repartition, than other types of patents, which are all tied with a particular country or region.

  5. Public research institutes, universities, organizations for standards, intellectual property protection, etc.…

  6. See March (1991) and Levinthal and March (1993).

  7. Domestic patenting activities are defined as all patenting activities made by residents of one country and managed through their national patent system. It is noted that in order to get protection for their innovations, applicants may use the following types of granting procedures, or combinations of them : national procedures, regional procedures, and international PCT procedure.

  8. Multinational companies may implement part of their technology. The economic benefits arising from their inventions are shared among countries: the country of invention, the country of ownership, and other countries.

  9. Technology is an output of an asset, namely technological capacity, and an input into some value added creating activities. It can take place through commercial means such as trade and foreign direct investment or through non-commercial means as in the form of technical journals, migration of skilled people, training of students, etc.

  10. For a review of the literature on firm-level analysis of absorptive capacity, see Zahra and George (2002).

  11. The main sources of knowledge absorbed at national level are foreign knowledge coming from foreign suppliers and customers; foreign non-firms organizations, as universities and public research institutes; stock of knowledge in the domestic firm sector and in the MNE subsidiaries; and stock of knowledge in the domestic non-firm sector.

  12. ᅟ

  13. See Grilliches (1990).

  14. Each co-patent is counted as a fraction, depending on how co-inventors and/or regions are weighted. In the case of a patent deposed by three inventors including two inventors with Spain addresses and one with a USA address, the corresponding invention is weighted as two thirds of competences originated from Spain and on one third originated from USA.

  15. There is a time lag between the priority date and the availability of patent information. To improve the timeliness of patent indicators, the latest years are estimated at an aggregated level. For this period, the patents are called “nowcasting” patents.

  16. European Union (28 countries)

  17. Co-operation in patents with abroad (Ab) reflects the international co-operation in research between the 16 Mediterranean countries and the rest of the world, focusing in particular in the network with EU countries, USA, and Japan.

  18. We weight the number of patents by the gross domestic product (GDP) of each country to make cross-country comparisons more meaningful.

  19. According to Penrose, “The only economic advantages to be gained from granting foreign patents lies in the possibility that in one way or another such grants will induce the introduction of foreign technology and capital” (Penrose, 1973, p. 770).

  20. See the Knowledge Assessment Methodology (KAM) developed by the World Bank.

  21. The Generalized Method of Moments (GMM) approach developed by Blundell and Bond (1998) is available in Stata 10.0 (Xtabond2; Roodman, 2006).

  22. Southern Mediterranean countries are in a process of transition from “resource-based” and “low-labour cost”-based economies, with significant trade protection to economies that wish to be incorporated in the global competition race for the knowledge economy. However, the Northern Mediterranean countries are already incorporated in the knowledge economy (World Bank, 2012).

  23. Lundvall defines national innovation system as “the elements and relationships which interact in the production, diffusion and use of new, and economically useful knowledge…and are either located within or rooted inside the borders of a nation state” (Lundvall, 1992; p. 12).

  24. Tunisia has created since 1992 a national evaluation system of its laboratories, research teams, and projects organized on a national level and with periodical review of activities. Algeria created since 1999 a national law on research which launched many specific research programs. Morocco and Egypt have been embarked in a profound revision of their research and innovation systems. The Eastern Mediterranean countries, like Lebanon and Syria, have promoted specific policies for innovation, and their research activities take often place in private universities.

  25. The R&D sector is not a priority for the southern Mediterranean countries. They specialize more in the intermediate and final production processes since they are less costly and risky. However, for the northern Mediterranean countries, complex relationship between licensor and licensee led to diminishing returns to research.

  26. Relationships between public and private research are based always on market relationships through selling licenses—the transfer of property rights from public research to private firms. This relationship is complex because when technological knowledge is protected by patent, public research is very careful about licensing his own property right (United Nations, 1975).

  27. Cross-border ownership of inventions is the result of activities of multinationals (Guellec and Van Pottelsberghe, 2001).

  28. For the southern and northern Mediterranean countries, the rigidity of their intellectual property system dissuades ambitious young researchers from innovating.

  29. Local researchers (high-skilled researchers) do not receive sufficient rewards due to the mismanagement of funds and the lack of political will to enhance their status.

  30. The significance of the coefficient of the lagged explanatory variable Techsize is an indicator of technological knowledge accumulation.

  31. As Barton (2004) said “the Strengthening of patent systems throughout the word appears likely to strengthen the position of incumbent multinationals and disfavor the independent development of technology by indigenous firms in developing nations” (p. 320).

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Authors and Affiliations

  1. Economic division, PSD2D research laboratory, Faculty of Economic Sciences and Management of Tunis, Tunis, Tunisia

    Hella Bani Baghdadi & Sami Aouadi

  2. Economic division, PSD2D research laboratory, Tunis El Manar University, Faculty of Economic Sciences and Management of Tunis, Tunis, Tunisia

    Hella Bani Baghdadi & Sami Aouadi

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  1. Hella Bani Baghdadi
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  2. Sami Aouadi
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Correspondence to Hella Bani Baghdadi.

Appendices

Appendix 1

Table 5 List of Mediterranean countries signatories of the TRIPs Agreement, 2014
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Appendix 2

Table 6 Sources of variables
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Baghdadi, H.B., Aouadi, S. Does Patent Performance Promote Relative Technological Performance in Countries Bordering the Mediterranean?. J Knowl Econ 9, 1246–1269 (2018). https://doi.org/10.1007/s13132-016-0409-1

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