Influence of Research and Development Expenditures on Number of Patent Aplications: Selected Case Studies in OECD countries and Central Europe, 1981-2001

Investment in R&D encourages innovation, which in turn, spurs economic growth. This paper presents a model to test whether that the number of patent applications is dependent on R&D expenditure, especially R&D expenditure in the business sector. This paper shows: 1) that a strong positive correlation exists between R&D expenditure and patent applications, 2) that R&D investment creates patent applications with a time-lag, which is different from country to country, 3) that the number of patent applications in developed countries depends more on R&D expenditure in the business sector than on R&D gross domestic expenditure.