Factors Affecting Innovation and Patent Propensity of SMEs : Evidence from Macedonia

The innovation and proprietary knowledge nowadays represent a basis for new competitive strategies of the companies. In that regard, the patents are among the most representative indicators for their innovative activities. This paper is primarily focused on assessing the relationship between innovation and patent propensity of SMEs. More precisely, the mainobjective is to identify the significant factors that affect patent propensity of SMEs and to determine the implications of patents upon the SMEs innovation. In this context, the paper encompasses an analysis of several relevant factors such as: the available resources of SMEs, the strategies for development of intellectual property rights and the impact of policy measures. The empirical analysis of the patent propensity of SMEs is performed in a country specific context for Macedoniawhich provides a basis for proposing appropriate policy recommendations