Olakojo, S; Renedo, E; King, M (2023) Time-to-patent: does NPL support accelerate innovation? NPL Report. IEA 18

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Abstract

The proponents of the economic theory justifying the creation of monopoly rights, through the granting of patents, claim that without patent protection, innovation would occur at a significantly reduced rate. This suggests that the timely development of new inventions strengthens the incentives for innovation. This study, therefore, focused on the extent to which R&D support provided by NPL reduces the time to a new patent among regularly supported firms compared to companies which only receive support occasionally. A probit model was estimated to identify variables that determine NPL’s support, while Propensity Score Matching was utilised to create counterfactual companies, and to assess the matching. The analytical framework―based on the Resource-Based theory of the firm― was estimated with Kaplan–Meier (log rank) test and Cox proportional-hazard model. A panel of 6793 companies for 19 years, between 1999 and 2017, was used with data sourced from NPL administrative data, FAME, ORBIS, EPO PATSTAT data on granted applications, Innovate UK grants, and Eurostat R&D intensive sectors (2 digit SIC Code). The analysis showed that important variables that determine selection into NPL support are past grants, assets, and patent intensity. The time to a new patent is 26% shorter for regularly supported companies compared to companies in the occasionally supported matched control group. This study also concludes that the propensity of developing a new patent is about 23% higher for regularly supported companies compared to the matched control group, but the differences in time-to-patent between them is weakly significant.

Item Type:	Report/Guide (NPL Report)
NPL Report No.:	IEA 18
Divisions:	Strategy Directorate
Identification number/DOI:	10.47120/npl.IEA18
Last Modified:	17 Apr 2023 13:52
URI:	https://eprintspublications.npl.co.uk/id/eprint/9686