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Omnia Juncta in Uno*: foreign powers and trademark protection in Shanghai's concession era

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  • Alfaro, Laura
  • Bao, Cathy
  • Chen, Maggie X.
  • Hong, Junjie
  • Steinwender, Claudia

Abstract

We investigate how firms and markets adapt to trademark protection, an extensively used but under-examined form of IP protection to address asymmetric information, by exploring a historical precedent: China's trademark law of 1923. Exploiting unique, newly digitized firm-employee and firm-agent datasets from Shanghai in 1872-1941, we show that the trademark law, established as an unanticipated and Western-disapproved response to end foreign privileges in China, shaped firm dynamics and relationships on all sides of trade-mark conflicts. Western firms with greater dependence on trademark protection grew and raised brand investment, while Japanese businesses, most frequently accused of counterfeiting, contracted despite attempts to build their own brands. The trademark law also fostered relationships with domestic intermediaries, both within and outside the boundaries of Western firms, and the growth of the Chinese intermediary sector. At the market level, the trademark law did not reduce competition or raise brand prices, leading to a coexistence of trademarks and competitive markets and ultimately gains in consumer welfare. A comparison with previous attempts by foreign powers-such as extraterritorial rights and bilateral treaties-shows that the alternative institutions were broadly unsuccessful. *Omnia Juncta in Uno ("All Joined in One") was the Latin motto on the municipal seal of the Shanghai International Settlement (1843-1941) and signified the joint governance of foreign powers in the settlement.

Suggested Citation

  • Alfaro, Laura & Bao, Cathy & Chen, Maggie X. & Hong, Junjie & Steinwender, Claudia, 2022. "Omnia Juncta in Uno*: foreign powers and trademark protection in Shanghai's concession era," LSE Research Online Documents on Economics 117758, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:117758
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    More about this item

    Keywords

    trademark; firm dynamics; intermediaries; competition; IP institutions;
    All these keywords.

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • D20 - Microeconomics - - Production and Organizations - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • F20 - International Economics - - International Factor Movements and International Business - - - General

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