Correlation of Relatedness and Complexity with Patent Applications: A Regional Analysis from Türkiye

Abstract

Purpose: The aim of this paper is to test the hypothesis that regional innovativeness is positively correlated with the two main building variables of smart specialization: relatedness density (a region’s potential to develop new technologies compatible with existing capabilities) and knowledge complexity (a region’s potential to develop unique and hard-to-imitate technologies).Methodology: Analysis are made over a panel regression model, using data from OECD-REGPAT database for the years 1978–2017 covering Türkiye’s NUTS-3 regions. The dependent variable is innovativeness, and the independent variables are the average relatedness density and knowledge complexity indices for each region. Per capita income, number of universities, number of technoparks, Turkish Patent Institute, Türkiye-EU Customs Union agreement, and lagged value of the dependent variable are the control variables.Findings: The results confirm that innovativeness and a region’s potential to develop new technologies that are compatible with existing technological portfolios (relatedness density) are correlated, while the variable that measures a region’s potential to develop unique technologies (knowledge complexity) is not statistically significant.Originality: The originality of this work is that we demonstrate relatedness to be one of the building blocks of smart specialization as correlated with regional innovativeness; complexity, the other building block, is not correlated.