Innovative output, and a firm's propensity to patent.

Abstract

We analyse a firm's propensity to patent, using a new indicator of innovative output. We find that a firm's propensity to patent is significantly higher among R&D collaborators, and it varies across sectors and by firm size. With a given innovation output, smaller innovators have a lower probability of applying for a patent. Smaller innovators that do apply for patents, however, tend to have higher numbers of patent applications than larger firms. The results have obvious consequences for the interpretation of patenting figures as an indicator of innovation.