INTELLECTUAL PROPERTY AND SMES PERFORMANCE: EVIDENCE FROM TWO ITALIAN CLUSTERS

In this century, characterized by increasing level of global competition, decreasing product life cycle and high technological development, the ability of firms to develop and exploit their innovative capabilities is widely recognized as a critical determinant of firm performance and competitive advantage. Intellectual Property (IP) represents knowledge which can be protected by recognized rights, called intellectual property rights (IPRs) which encompass patents, trademarks, design and copyrights. Our paper aims at studying the relationship between two different IPRs, patents and trademarks, and economic and financial performance of SMEs in two different Italian industries. It helps fill the gap in knowledge of the use of IPRs by SMEs, which has been under-researched, and of the emerging body of literature about the relevance of branding activity. In line with previous studies, we propose an approach that uses cross-sectional time series regression to investigate the relationship between the dependent and independent variables, testing different time-lags. We use a fixed effect model with firm and year dummy variables to control for multiple observations per firm and per year. Drawing on the results, we hypothesize explanations of our findings and suggest directions for future research.