Technology and Investment, 2013, 4, 1-9 doi:10.4236/ti.2013. 43B001 Published Online August 2013 (http://www.scirp.org/journal/ti) Assessing Some Determinants of the Regional Patenting: An Essay from the Mexican States Vicente German-Soto 1 , Luis Gutiérrez Flores 2 1 Facultad de Economía, Universidad Autónoma de Coahuila, Unidad Camporredondo, Edificio “E”, Planta Baja, C.P. 25280, Saltillo, México 2 Centro de Investigaciones Socio-Económicas (CISE), Universidad Autónoma de Coahuila, Unidad Camporredondo, Edificio “S”, Planta Baja C.P. 25280, Saltillo, México Email: vicentegerman@uadec.edu.mx, luis.gutierrez@uadec.edu.mx Received April, 2013 ABSTRACT The aim of this work is to study the environment that affects and influences in the creation of regional patents. With this purpose the patenting process is modeled as dynamic one where, beside other factors, its past values contribute to create synergies to continue patenting in a feedback process. Using a dynamic panel data estimator we find that past patenting level trends to encourage the actual one. Also, a positive and significant effect from education, university expenditure, population density and industrial concentration on patents is reported in the Mexican states set. Conclusions highlight that agglomeration forces are the main factors for patenting, followed by university expenditure and industrial concen- tration. Keywords: Patents; Innovation; Agglomeration; Dynamic Panel Data; Education 1. Introduction Patents itself are expressions of new knowledge and in- novative activities on how to produce and how to in- crease the productivity and despite of the existence of clear disadvantages in its use as an output of the innova- tion activity –about it, see [2,18]– it has widely been ac- cepted everywhere. One explanation could be that the innovation is a wide concept very difficult to measure and one of its preferred measures has been the count of patents. Another explanation is, maybe, that count of patents is a statistical number easy to obtain for a great set of countries and economies. There is an extensive literature considering patents for several purposes, but mainly as measure to analyze the technical change. For example, it has been considered as a catalyst for technical change and the technical change as key element to reach majors levels of economic growth and international trade, primarily from a theo- retical perspective. At this respect, [29] examines a search model of growth in which ideas are productivity levels that are drawn from a distribution. He shows that only way to get exponential growth in such model is if ideas are drawn from a Pareto distribution. [26] maps a production function where the elasticity of substitution depends on the extent to which new techniques that are appropriate at higher capital-labor ratios have seen dis- covered. In his model the global production function is Cobb-Douglas and technical change in the long run is labor-augmenting. Others, such as [10], and Slottje (2007) present a model where patent activity serves as catalyst for technical change and they examine if it has occurred over time. [34] reports a decreasing relationship between how strong the optimal patent protection should be and the ability of the economy to successfully follow risky innovation strategies. This finding suggests that devel- oping economies should adopt a more strict intellectual property policy, compared to the ones followed by more advanced economies. Other studies have used patents statistics to examine different aspects about the realization of technological change. The relationship between patents and Research & Development (R&D) expenditures, patents and knowledge spillovers, patents and inventiveness rate of growth, patents and economic growth, and some others have been examined in some detail in literature –see, for instance, [3,9,23]. There appears to be a consensus that patent statistics reflect somehow the technological state of the art of a country, or its ability to embed technical change into the functioning of the economic system. However, count of patents is a general measurement of the innovation level and its only consideration is not suf- ficient to estimate the true level of innovation of the economies. One patent has the property of being useful Copyright © 2013 SciRes. TI