Examining the relationship between patent applications and financial positions in the upstream Oil and Gas Industry: Evidence from Brazil

Abstract

With the discovery of the Pre-Salt reserves, exploration of oil and gas has been strongly extended in Brazil, contributing to the recent increase in the demand for drilling capabilities. This paper discusses the impact of this oil discovery by assessing the relationship among the growth of proven reserves, firms' financial position, and patent applications in the Brazilian upstream oil and gas industry. We provide empirical evidence that the growth of proven oil reserves stimulates firms to apply for patents. The results also indicated that organizations with higher financial performance were more aggressive in increasing the number of patent filings addressing the upstream oil and gas domain technologies.