Non-resident patenting: its determinants and impact on the host country

Abstract

This thesis is an endeavour to examine the determinants of non-resident patenting1 and its impact on innovative and productivity performances of the host country. Past research suggests that innovation has been a key driver of countries’ economic growth and development, and a prime factor of competition in the global market (Aghion & Howitt, 1992; Oslo Manual2 OECD, 2005). A country’s economic growth evolves through three stages in terms of technological change and productivity. First, factor-driven growth in which economies produce goods based on naturally available resources with low labour cost. Second, investment-driven growth in which economies accumulate technological, physical and human capital and offer investment incentives. Last, innovation-driven growth in which economies emphasise research and development (R&D), entrepreneurship, and innovation (Koh & Wong, 2005; Rostow, 1959; WEF, 2012; Raghupathi & Raghupathi, 2019). Schumpeter (1942) stated that R&D has a high effect on innovation that leads to productivity enhancement and economic growth. The endogenous growth models by Romer (1990), Grossman and Helpman (1991) and Aghion and Howitt (1992) indicate that innovations and the accumulation of knowledge are the drivers of total factor productivity (TFP) and economic growth.