Protecting intellectual property to enhance firm performance: does it work for SMEs?

In this century, characterized by increasing level of global competition and high technological development, the ability of firms to develop and exploit their innovative capabilities is widely recognized as a critical determinant of firm performance and competitive advantage. Intellectual Property represents knowledge that can be protected by recognized rights, called intellectual property rights (IPRs) that encompass patents, trademarks, design and copyrights. Our paper aims at studying the relationship between two different IPRs, patents and trademarks, and economic and financial performance of SMEs in two different Italian industries. It helps fill the gap about the use of IPRs by SMEs, which is still under‐researched. In line with previous studies, we propose an approach that uses a panel regression model, supported by a t‐test, to investigate the relationship between the dependent and independent variables. Drawing on the results, we hypothesize explanations of our findings and suggest directions for future research.