The impact of institutions on patent propensity across countries

This article offers a novel critique of the impact of institutions on the propensity to patent across countries. Patenting policy is known to carry deep-rooted institutional implications. Yet in the case of developing countries, the United Nations created only loose policy concerning the role of the government, the business sector, and multinational enterprises in promoting patenting activity. The United Nations' implicit laissez-faire approach to regulating the business sector equates developing countries with advanced ones. Within developing countries, twenty-four emerging economies are presumed to have evolved into hotbeds for meaningful innovation, but little thought has thus far been given as to how their institutional particularities promote patenting as a proxy for domestic innovation. Advanced economies and emerging economies diverge over how the innovation activity of their government and business sectors impacts the propensity to patent. In emerging economies, there is a negative relationship between the innovation activity of the business sector and the propensity to patent. For advanced economies, on the other hand, there is a negative relationship between the innovation activity of the government and patent propensity. This article argues for a reexamination of the policy concerning the role of institutions in incentivizing patenting activity as a proxy for domestic innovation in emerging economies.