Essays on Locational Patenting Behavior of Innovators

• Author / Creator

  Zhao, Long

• The last two decades have witnessed a sharp increase in patent applications filed abroad by domestic innovators. Understanding how firms decide where to patent helps policymakers design policies to encourage domestic innovators to patent abroad or attract foreign innovators to patent in the domestic economy. Studies of locational patenting decisions are limited due to confidentiality issues that prevent researchers from merging firm-level data to patent data across countries. This thesis overcomes this hurdle for Canadian firms' patenting in Canada and the U.S. under arrangements with Statistics Canada that maintain legal confidentiality requirements. This thesis aims to study firms' locational patenting behavior, both empirically and theoretically.

  I start this thesis with a comprehensive literature review on innovators' decisions of whether to patent and where to patent. Based on the literature, I empirically analyze what factors affect Canadian firms' decisions to patent in Canada and the U.S. using a unique dataset in Chapter Two. Interestingly, when the Canadian Intellectual Property Office (CIPO) enhanced its cooperation with other patent offices, more Canadian firms were encouraged to patent in Canada. This finding motivated me to investigate further how CIPO's role as an International Search Authority (ISA) in the Patent Cooperation Treaty (PCT) affects Canadian firms' patenting decisions in Chapter Three. The empirical investigations do not answer how firm characteristics, business opportunities, and patent system design affect firms' locational patenting decisions. Thus, I develop a theoretical framework to investigate how firms decide where to apply for patents in Chapter Four.

  Several empirical findings deserve our attention. First, Canadian firms' propensity to patent increases in firm size and research and development (R&D) intensity, but decreases in firm profitability and age. Second, the likelihood of patenting in both the U.S. and Canada is associated with past patenting experience, firm size, profitability, and patent scope. Third, while manufacturing firms in export intensive industries tend to patent in both countries, firms in Foreign Direct Investment (FDI) intensive industries are more likely to patent domestically only. Moreover, CIPO's role as an ISA was associated with an increase in the number of patent applications by Canadian firms. Foreign-owned firms are the major contributor to the increased patenting.

  Furthermore, my theoretical analyses show that high-quality innovations are more likely to be patented in multiple countries. As well, patent offices with lower application fees and tougher examination intensities face a trade-off between patent quality and application quantity. Besides, business opportunities in a country can be an important factor in determining innovators' locational patenting decisions. In particular, I compare a simultaneous application system, in which an innovator submits his patent applications simultaneously to several patent offices, with a sequential application system, where his applications are submitted sequentially. Moreover, if third parties can observe application outcomes of the same innovation at different patent offices, it refers to information availability. My results suggest that information availability and application sequence could increase the perceived quality of patents and encourage more firms to apply for patents.

  Certain policy implications emerge from the results of this thesis. On the one hand, if the policy target is to attract firms to apply for patents in their home country, the domestic patent office may set preferential policies towards young and small firms. On the other hand, if the policy target is to encourage firms to apply for patents abroad, policymakers should design policies to reduce the barriers for firms to do business and enhance cooperation with other countries (e.g., PCT). The theoretical results also have several policy implications. First, if the policy target is to encourage firms to patent, one crucial direction is to improve firms' business environment to exploit their innovations. Second, patent offices can support cross-border patenting by increasing information availability and pushing innovators to apply for patents in sequence.

• Subjects / Keywords

  • Locational patenting behavior

• Graduation date

  Fall 2020

• Type of Item

  Thesis

• Degree

  Doctor of Philosophy

• DOI

  https://doi.org/10.7939/r3-6bgn-jj78

• License

  Permission is hereby granted to the University of Alberta Libraries to reproduce single copies of this thesis and to lend or sell such copies for private, scholarly or scientific research purposes only. Where the thesis is converted to, or otherwise made available in digital form, the University of Alberta will advise potential users of the thesis of these terms. The author reserves all other publication and other rights in association with the copyright in the thesis and, except as herein before provided, neither the thesis nor any substantial portion thereof may be printed or otherwise reproduced in any material form whatsoever without the author's prior written permission.