We examine the contribution of judicial efficiency to patenting propensity using a large dataset from European Patent Office with 15,000 firms for the period 1995-2015. The results reveal that judicial efficiency matter greatly for firm-level patenting activity. Effective administration of intellectual property law and low-cost enforcement are found to foster patenting activity considerably. The effects are robust to various mis-specification checks and do not disappear once country-level R&D infrastructure proxies are controlled for. The extreme bounds of judicial efficiency are computed across more than 5 billion regressions and confirm the sizeable impact of judicial administration on patent application and validation outcomes.
