Not Patents but Trademarks-Based Path of Technological Development of Latecomers: Evidence From the Korean Data

Abstract

In contrast to the vast literature on verifying the importance of formal R&D activities measured as patent registrations, this paper explores the possibility of not patent but trademark-driven path of latecomer firms’ technological development. The study is motivated by the evidence from the Korean data showing the existence of two groups of sectors where firms in the one group tended to file more trademarks than patents. We find that in the first group of sectors, like food, apparel, and pharmaceuticals, trademarks have been the most applied form of the IPRs with a much large number of their registrations than patents from the initial stage of development until recently, whereas in the second group of sectors, like electronics and automobiles, the main IPR form has been patents. Regressions on the determinants about this bifurcation find that the trademark groups are those sectors involving more tacit knowledge and/or domestic market orientation associated with slow progress in technological capabilities. The results are important because it implies the existence of alternative path of economic development by the latecomer firms in different sectors, beside the patent-driven path which is already verified in Kim et al. ( 2012 ). Appropriate intellectual property protection and economic growth in countries at different levels of development. Research Policy, 41(2), 358–375, http://dx.doi.org/10.1016/j.respol.2011.09.003 .

How Industrial Design Matters for Firm Growth at Different Stages of Development: Evidence from Korea, 1970s to 2010s

“…Overall, the only one significant and robust finding that emerges from the sectoral analysis is that higher export orientation of a sector is associated with high design intensity. This result is comparable to the result in Kang et al (2020b) that sectors involving a high degree of tacit knowledge and an initially low level of technological capabilities are associated with high intensity of trademarks.…”

“…Following Gonzalez and Mariano (2007) and Jung and If the value of Export-dummy1 is one for more than 20 years in a sector during 1970 to 2010, then the sector is classified as an export-oriented sector for the whole period. Lee (2010), Kang et al (2020b) explain that more patent applications per unit of R&D expenditures at a sector reflects higher explicitness/codifiable-ness of knowledge. While tacit knowledge cannot be filed as patents, explicit knowledge can.…”

“…However, the number of patents and utility models did not significantly increase. Until the 1970s, trademarks and designs were more prevalent than patents and utility models (Kang et al ., 2020a,b). Only since the 1980s have chaebols, big businesses in Korea, placed emphasis on their own in‐house R&D. The government initiated a series of national R&D projects in 1982, including a series of joint private–public R&D consortiums (OECD, 1996).…”

“…While Thoma (2020) finds a mutually reinforcing effect, Llerena and Millot (2020) find that such effects vary across sectors. In the context of emerging economies, Lee (2019) and Kang et al (2020aKang et al ( , 2020b observe two different paths of technological development in developing economies: patent-driven 2 Patents protect innovations of relatively high inventiveness, whereas utility models protect innovations of limited inventiveness. Utility models thus offer second-tier protection for minor inventions that embody practical or functional advantages over existing inventions (Lee, 2019;Ch.…”

“…In the context of emerging economies, Lee (2019) and Kang et al . (2020a, 2020b) observe two different paths of technological development in developing economies: patent‐driven versus trademark‐driven. In addition, some sectors rely more on trademarks than patents as their IPR instruments.…”