ABSTRACT
The link between the global performance of countries as measured by Total Factor Productivity and their performance in terms of innovation as measured by patents is discussed in four steps. First, the theoretical grounds for a patent system are presented. The emphasis is made on the second-best nature of this institution. Second, the emergence of patents in history is examined in order to stress how countries have diverged in the design of their patent system. Third, the relevance of patent counts as a measure of inventive capacity is discussed. Fourth, a cointegration test of the long-term link between Total Factor Productivity and an indicator of the inventive capacity based on patent counts is proposed. This leads to the conclusion that there is no clear-cut empirical evidence of this link.
