Patents, Innovations and Economic Growth in Japan and South Korea: Evidence from individual country and panel data

Sinha, Dipendra (2007): Patents, Innovations and Economic Growth in Japan and South Korea: Evidence from individual country and panel data.

Abstract

This paper looks at the relationship between patents and economic growth in Japan and South Korea using both individual country and panel data. For the econometric estimation, we use annual data for 1963-2005. For Japan, we find that the logarithms of real GDP and the number of patents are cointegrated. For South Korea, we do find such evidence. For Japan, we find a two-way causality between the growth of real GDP and the growth of the number of patents. For panel data, we find that the logarithms of real GDP and the number of patents are cointegrated. We find some evidence that the growth of real GDP Granger causes the growth of the number of patents. However, we do not find any evidence of reverse causality.

• Item Type: MPRA Paper
• Institution: Ritsumeikan Asia Pacific University and Macquarie University
• Language: English
• Keywords: patents; innovations; panel data
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O30 - General; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General

References

Beldebros, R. (2001), “Overseas Innovations by Japanese Firms: An Analysis of Patent and Subsidiary Data,” Research Policy, vol. 30, pp. 313-332.

Hadri, K. (2000), “Testing for Stationarity in Heterogeneous Panel Data,” Econometric Journal, vol. 3, pp. 148–161.

Im, K. S., Pesaran, M. H., and Y. Shin (2003), “Testing for Unit Roots in Heterogeneous Panels,” Journal of Econometrics, vol. 115, pp. 53–74.

International Monetary Fund (2007), International Financial Statistics Online, March.

Levin, A., Lin, C. F., and C. Chu (2002), “Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties,” Journal of Econometrics, vol. 108, pp. 1–24.

Maddala, G. S. and S. Wu (1999), “A Comparative Study of Unit Root Tests with Panel Data and A New Simple Test,” Oxford Bulletin of Economics and Statistics, vol. 61, pp. 631–52.

McDaniel, C. (1998), “Legal Features of the Japanese Patent System and Impacts on Technology Diffusion,” Center for Economic Analysis Working Paper No. 98-29, University of Colorado at Boulder.

Ng, S. and P. Perron (2001), “Lag Length Selection and the Construction of Unit Root Tests with Good Size and Power”, Econometrica, vol. 69, pp. 1519-1554.

O’Keeffe, M. (2005), “Cross Comparison of US, EU, JP and Korean Companies Patenting Activity in Japan and in the Peoples Republic of China,” World Patent Information, vol. 27, pp. 125-134.

Pedroni, P. (1999), “Critical Values for Cointegration Tests for Heterogeneous Panel with Multiple Regressors,” Oxford Bulletin of Economics and Statistics, vol. 61, pp. 653–670.

Pedroni, P (2004), “Panel Cointegration: Asymptotic and Finite Sample Properties of Pooled Time Series Tests with an Application to the PPP Hypothesis,” Econometric Theory, vol. 3, pp. 579–625.

US Patent Office (2007), http://www.uspto.gov/web/offices/ac/ido/oeip/taf/reports.htm