Patent Filings and Export Performance: The Interplay of Innovation in India’s Pharmaceutical Industry

Abstract

India’s pharmaceutical sector is instrumental in ensuring the global availability of essential medicines, with growth in exports paralleled by increased patent filings, highlighting innovation's role. This study analyzes the relationship between exports and patent filings (1995-2021) using the Phillips-Perron test, Johansen cointegration test, and VECM. Findings show a significant long-run equilibrium relationship, underscoring the interconnection between innovation and export performance. However, the Granger causality test reveals no short-term predictive relationship (Granger,C.W.J. 1969), indicating that other factors influence short-term trends. These results highlight the need for long-term policies to boost innovation and export growth, enhancing India's pharmaceutical sector's global competitiveness.