The Effects of Innovation Partnership, Foreign Ownership and Enhanced Management Practices on the Use of Patents in Brazilian Manufacturing

Abstract

The bulk of evidence regarding firms‘ patent behaviour derives from institutional environments where a relatively strong protection can be obtained even if patents per se are imperfect protection mechanisms. Our knowledge as to the determinants of firms‘ propensities to patent in weak appropriability regimes is still unclear. Thus, this paper explores the effects of firms‘ innovation partnerships, ownership, and adoption of new management practices on the likelihood of using patents in Brazilian manufacturing. Our analysis derives from responses of firms to questions in the Brazilian Industrial Survey of Technological Innovation (Pintec) and is based upon logit model estimates indicating the likelihood that firms‘ various attributes make them more inclined to pursue patents. The findings indicate that firms that have adopted more sophisticated management practices are those less likely to use patents, and this runs against documented evidence from more developed settings where patents have become a prominent managerial device. In addition, the results reveal that domestic and foreign firms in Brazilian manufacturing have no dissimilarity as to their inclination to use patents. Finally, and counter-intuitively, despite the weakness of the Brazilian appropriability regime firms engaged in innovation-oriented collaborations rest on patenting to avoid unintended knowledge spillovers.