Determinants of Innovative Activity in Canadian Manufacturing Firms: The Role of Intellectual Property Rights

Statistics Canada Working Paper No. 122

38 Pages Posted: 10 Jul 2000

See all articles by John R. Baldwin

John R. Baldwin

Statistics Canada - Microeconomic Analysis Division

Petr Hanel

Université de Sherbrooke - Department of Economics

David Sabourin

Statistics Canada

Date Written: March 7, 2000

Abstract

This paper examines how several factors contribute to innovative activity in the Canadian manufacturing sector. First, it investigates the extent to which intellectual property right protection stimulates innovation. Second, it examines the contribution that R&D makes to innovation. Third, it considers the importance of various competencies in the area of marketing, human resource, technology and production to the innovation process. Fourth, it examines the extent to which a larger firm size and less competition serve to stimulate competition-the so-called Schumpeterian hypothesis. Fifth, the effect of the nationality of a firm on innovation is also investigated. Finally, the paper examines the effect of an industry's environment on a firm's ability to innovate.

Several findings are of note. First, the relationship between innovation and patent use is found to be much stronger going from innovation to patent use than from patent use to innovation. Firms that innovate take out patents; but firms and industries that make more intensive use of patents do not tend to produce more innovations. Second, while R&D is important, developing capabilities in other areas, such as technological competency and marketing, is also important. Third, size effects are significant. The largest firms tend to be more innovative. As for competition, intermediate levels of competition are the most conducive to innovation. Fourth, foreign-controlled firms are not significantly more likely to innovate than domestic-controlled firms once differences in competencies have been taken into account. Fifth, the scientific infrastructure provided by university research is a significant determinant of innovation.

JEL Classification: O47

Suggested Citation

Baldwin, John R. and Hanel, Petr and Sabourin, David, Determinants of Innovative Activity in Canadian Manufacturing Firms: The Role of Intellectual Property Rights (March 7, 2000). Statistics Canada Working Paper No. 122, Available at SSRN: https://ssrn.com/abstract=229792 or http://dx.doi.org/10.2139/ssrn.229792

John R. Baldwin (Contact Author)

Statistics Canada - Microeconomic Analysis Division ( email )

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Petr Hanel

Université de Sherbrooke - Department of Economics ( email )

Sherbrooke, Quebec J1K 2R1
Canada

David Sabourin

Statistics Canada ( email )

Ottawa, Ontario
Canada
613-951-3735 (Phone)

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