Analyzing the Relationship between Patents and Exports Using Country Level Data

Abstract:

This paper analyses the correlation between total number of patent applications and lagged exports in a country and suggests that countries with higher number of patent applications will have significantly larger number of exports in the following year. Motivated by quality ladder theory that emphasize the importance of innovations and technological progress in increasing exports, this paper uses regression analysis to show the strong relationship between patents and one and two year lagged exports.