The Use of Patent Data for Research
This section describes strengths and weaknesses of the use of patent data and why we apply patent citations as a proxy for the economic value of inventions and global knowledge outflows. Patent data are attractive for researchers and are broadly used as a technology indicator. One of the biggest advantages of them is their availability from patent offices in most countries all over the world. Furthermore, patents cover most fields of innovation in most developed countries and over a long period of time. Patent information is broadly used in the analysis of the particular aspects of innovation processes, such as output, knowledge spillovers, directions of research, etc. (Harhoff et al. 2003). There is a positive and proportional correlation between patent counts and R&D expenditures. This relationship is stable for firms above a minimum size (Griliches 1990). In view of industry specific propensities for patenting, patent analysis is particularly valuable in industries that are characterized by a high share of patented technologies such as ICT, biotechnology and automotive. However, patent data also entails some difficulties to work with. First of all, institutional factors, such as aspects of patent law and procedures that may vary in different countries, should be taken into account. Secondly, there are differences in patenting behavior across industries, patent institutions, markets, types of inventors and firms.
Hence, patent counts are a good proxy for innovation input and technological activities. SMEs should be considered very carefully because the overall number of patents is small. In this case analytical results can be easily biased or exaggerated. According to Griliches (1990), patent data can be used as an indicator of both inventive input and output. However, there are a number of reasons why it is not always best indicator for the inventive output. The shortcomings of pure patent data bring us to Sect. 3.3 which describes patent citations and why they are a good proxy for economic value of patents and for assessing technological flows.