DP4945 Assessing the Foreign Control of Production of Technology: The Case of a Small Open Economy

Author(s): Michele Cincera , Bruno van Pottelsberghe de la Potterie , Reinhilde Veugelers

Publication Date: March 2005

Keyword(s): internationalization of R&D , patent statistics , Belgian economy

JEL(s): F23 , O30 , O33 , O57

Programme Areas: Industrial Organization

Link to this Page: www.cepr.org/pubs/dps/DP4945.asp

International R&D activities have grown significantly over the last two decades. Both the number of actors involved, as well as the importance of the technological activity carried out abroad, has considerably increased. We aim to quantify the international generation of knowledge for the case of Belgium, using indicators based on EPO and USPTO patent data (1978-2001). We distinguish among Belgian applicants, affiliates of foreign firms located in Belgium as well as Belgian based firms with affiliates abroad. This approach allows improvement of existing indicators of internationalization of technology based on patent data. The results are consistent with what can be expected for a small open economy such as Belgium. A large part of patents with Belgian inventors are assigned to Belgian affiliates of foreign firms. Hence our more complete indicator of foreign ownership gives a substantially higher foreign control of Belgian inventors. Relatively more knowledge generated by Belgian inventors flows out of the country towards foreign owners of technology, than knowledge generated abroad is owned by Belgian patent applicants. But the share of foreign inventors to Belgian assigned patents is increasing considerably over time, especially in the subcategory of Belgian firms with foreign affiliates.