Formalising intellectual property protection as a key indicator of the evolution of a developing country MNC

Abstract

Prior research on capability upgrading in developing country firms has emphasised the importance of gaining legitimacy in the public domain. For technology-based firms this implies disclosure of knowledge assets through patents and scientific publications. In the absence of a managed approach to intellectual property (IP) protection, this disclosure often takes place in a desultory manner with disappointing results. Therefore, this research focuses on the formalisation of IP as a key indicator of the evolution of a developing country technology-based MNC using Sasol as a case study. The paucity of research into South African firms compared to the abundance of literature on the evolution of firms from other developing countries provides further justification for this study. Patent and publication data associated with Sasol (1955-2005) was analysed using multidimensional scaling and multiple regression techniques in order to examine the nature of disclosure. Patent value was estimated using forward citations and an adaptation of Putnam’s Value Index, while journal impact factors served as a proxy for the value of scientific publications. The role of international connections was investigated by examining co-authorships. The evidence suggests that formalisation of IP promotes an awareness of the purpose of disclosure, enhancing indigenous capability to appropriate returns from R&D and gain legitimacy within the global research community. This evolutionary trajectory may be accelerated by leveraging international research connections.