Neither at the cutting edge nor in a patent-friendly environment: Appropriating the returns from innovation in a less developed economy

Abstract

Despiteincreasedfocusonunderstandinghowfirmsappropriatethereturnsfrominnovation,ourknowledgeregardingfirms'behaviourinlessdevelopedeconomies(LDEs)isstillscant.Thispaperprovidesanuancedviewastohowfirmsthatarenotatthetechnologicalfrontierattempttocapturevaluewhentheyencounterfragilepatentingconditions.IanalyseauniquedatasetoninnovativeactivitiesinBrazil.Myfindingsrevealtheeffects(ifany)ofanumberoffactorsontheuseofawiderangeofappropriabilitymechanisms.Thesefactorsincludemeasuresofknowledgeintensity,noveltyofproductsandprocesses,firmsize,degreeofcompetition,innovationcooperation,governmentsupportforinnovation,andtypeofownership.Inaddition,myempiricalexerciseprovidesevidenceoftheextenttowhichfirmsinanLDEadoptdifferentappropriabilitymechanismsinpairs.Overall,thispaperindicatesthatevenintheabsenceofaneffectivepatentsystem,firmsdousepatents.However,thereareotherpatternsofappropriabilityinwhichfirmsusedesign(beingregisteredornotregisteredaccordingly),lead-timeortrademarksinassociationwithothermeansofappropriatio