Patent in the Developed and Developing Countries: The Roles of Research and Development, Economic Growth, and Government Effectiveness

Despite the essential of patents for innovation and economic growth, the linear and causality relationships are underdeveloped, ambiguous, and uncertain, especially in developing countries. Using endogenous growth theory and patent cooperation treaty framework, this article probe into the roles of research and development, economic growth, and government effectiveness in promoting patents. We retrieved annual data from 52 developed and developing countries from 1996 to 2022. We applied heterogeneous and second-generational Augmented Mean Group and Common Correlated Effect Mean Group econometric estimators buoyant to slope heterogeneity and cross-sectional dependency to panel data revolving around the heterogeneous countries. Our findings indicated that research and development promote patents, economic growth plays a crucial role in promoting patents, government effectiveness positively influences patents with stronger elasticities in developing countries than developed nations, highlighting the untapped potential for rapid patent growth in these nations through the strategic utilization of government support and research and development initiatives, and trade openness and foreign direct investment exert a controlling influence on patents. The study uncovers a bidirectional link between government effectiveness, economic growth, research and development, and patents, emphasizing the need for realistic patent policies and increased support for innovation by governments worldwide.