The objective of this paper is to investigate the relationship between R&D expenditures and the numbers of patent applications coming to contracting states of the European Patent Convention (EPC). Annualised data on patent application filings and R&D expenditures from 1963 to 1993 were collected for each state. Regression models were constructed to relate domestic first filings (DF) in contracting states of the European Patent Convention (EPC) to R&D expenditure in those states. The models gave an indication of the time-lag effect of R&D on DF, as well as on the nature of the effect (data for Germany were restricted to the former West Germany). Two types of regression models were used. Time-series analysis transfer functions were successfully fitted to 10 of the 13 states, with an average time lag estimated as 3.6 years. Linear regression analysis also gave acceptable models when fitted to the whole data sets, but only in six of the 13 states. However, if linear regression was restricted to DF data from 1980 onwards, acceptable models were found for 11 of the 13 states, with an average lag estimated as 2.8 years. When the most appropriate model was selected for each state, the average delay was estimated as 3.7 years. Comparison of the forecasts with actual results suggests that the method is reasonably accurate.
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