Determinants of firm’s propensity to patent its inventions

Purpose: The purpose of this paper is to ascertain the factors that influence the decision of a firm in a cluster to patent its inventions. Design/methodology/approach: This study adopts a stratified random sampling technique to choose 101 sample firms from the identified population of firms in a cluster. Further, it uses the primary data collection method to collect data from sample firms through semi-structured questionnaires and in-depth interviews with the top level management of the sample firms. Furthermore, it carries out binary logistic regression analysis to primarily examine the influence of capability and willingness factors of a firm on the propensity of a firm to patent its inventions. Findings: The paper corroborates from the results of the binary logit model that invention capacity has a significant positive impact on a firm’s propensity to obtain patents. In addition, the absorptive capacity of a firm above a certain threshold is likely to have a significant positive influence on the decision of a firm to patent its inventions. On the one hand, between the two motivator factors conventional motivators and strategy related motivators, conventional motivator factor has a significant positive influence on a firm’s propensity to obtain patents. On the other hand, both the de-motivator factors (time, market and cost constraints and procedural issues) have a significant negative influence on a firm’s propensity to patent its inventions. Originality/value: This paper makes a key contribution to the existing literature by empirically validating the influence of capability of a firm in terms of its invention and absorptive capacities, and willingness of a firm constituting motivator and de-motivator factors, on the decision of a firm to obtain patents, in the context of a firm in a high-tech manufacturing cluster in a developing economy.