Has EU accession boosted patents performance in the EU-13? -- A critical evaluation using causal impact analysis with Bayesian structural time-series models

Abstract: Nowadays innovation is one of the main determinants of economic development. Patents are a key measure of innovation output, as patent indicators reflect the inventive performance of countries, technologies and firms. This paper provides new insights on the causal effects of the enlargement of the European Union (EU) by investigating the patents performance within the new EU member states (EU-13). The empirical results based on data collected from the OECD database from 1985-2017 and causal impact using a Bayesian structural time-series model (proposed by Google) point towards a conclusion that joining the EU has had a significant impact on patents performance in Romania, Estonia, Poland, Czech Republic, Croatia and Lithuania, although in the latter two countries the impact was negative. For the rest of the EU-13 countries there is no significant effect on patent performance. Whether the EU accession effect is significant or not, the EU-13 are far behind the EU-15 (countries which entered the EU before 2004) in terms of patent performance. The majority of patents (98.66\%) are assigned to the EU-15, with just 1.34\% of assignees belonging to the EU-13.