High-speed railway and patent trade in China

The market for patent trade can play a crucial role in stimulating R&D and technology transfer, but is often geographically constrained. While previous research has analyzed theoretical impediments to patent trade, there is limited empirical evidence. In this paper, we use China’s high-speed railway (HSR) construction as a quasi-natural experiment to examine the causal effect of face-to-face contact on patent trade between cities. Using a novel database of patent trade based on public patent application and ownership reassignment records from 2006 to 2019, we estimate a staggered difference-in-differences model at city pair-year level. We find that HSR significantly increases patent trade between cities, especially from technologically advanced cities to technologically disadvantaged cities. We also find that the HSR effect is stronger for high-value patents and for trade between cities with low mutual trust, suggesting that HSR reduces contract barriers more than information barriers in patent trade.