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This paper estimates the effect of research and investment activities on patents across countries, industries and over time, using Poisson and negative binomial distribution models. The first result of the paper is the recognition of the importance of investment activities in contributing to technical change. The positive role of research expenditures is also confirmed but its elasticity is found to be lower than in previous studies. Important differences across sectors emerge: research expenditures are found to be more effective in generating patents in science based industries, while investment is particularly significant in supplier dominated and production intensive industries. Finally, in most sectors, the estimated R&D and investment coefficients lie outside the confidence intervals calculated around the pooled coefficients.
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