This paper examines the role of public and private R&D spillovers and other determinants on the propensity to patent (whether firms engage in patenting activity) and patenting output (the number of patent applications). Knowledge spillovers are constructed based on the research profiles of businesses and public research institutions, respectively. We find that both private and public spillovers have an impact on patenting behaviour, though in opposite directions. Spillovers from business R&D have a negative impact, potentially reflecting adverse effects of rival firms’ R&D on expected returns of own patenting activity. In contrast, public spillovers are found to have a positive effect on patenting activity, possibly reflecting the value to firms’ patenting activity of basic and applied research conducted by public research institutes.
Keywords: R&D, public and private spillovers, absorptive capacity, patents