innovation trends in nafta countries: an econometric analysis of patent applications

This paper analyzes innovation trends in North America Free Trade Agreement (NAFTA) countries by means of the number of patent applications during the period 1965 to 2008. Making use of patent data released by the World Intellectual Property Organization (WIPO) and the Network for Science and Technology Indicators (Red Iberoamericana de Ciencia y Tecnología, RICYT), we search for presence of multiple structural changes in the patent applications series in Canada, Mexico, and the United States. Such changes may suggest that firms’ innovative activity has been modified in these countries (Mansfield, 1986). Accordingly, it would be expected that the new regulations implemented in these countries in the 1980s and 1990s have influenced their intellectual property regimes through the NAFTA and the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. Consequently, the question conducting this research is how the new dispositions affecting intellectual regimes in NAFTA countries have affected innovation activities in these countries. The results achieved in this research confirm the existence of multiple structural changes in the series of patent applications resulting from the new legislation implemented in these countries.