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International Technology Licensing, Intellectual Property Rights, and Tax Havens

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  • Ana Maria Santacreu

Abstract

This paper investigates the determinants of international technology licensing using data for 50 countries during 1996-2012. A multi-country model of innovation and international technology licensing yields a dynamic structural gravity equation for royalty payments as a function of fundamentals, including imperfect intellectual property protection and differences in corporate taxation. The gravity equation is estimated with nonlinear methods. The model's fundamentals account for about 60% of the variation in royalty payments. A quantitative analysis sheds light on the impact of global taxation reforms on both international technology licensing and innovation. The findings highlight the crucial role of taxation in shaping cross-border flows of technology and the potential consequences of profit-shifting strategies.

Suggested Citation

  • Ana Maria Santacreu, 2019. "International Technology Licensing, Intellectual Property Rights, and Tax Havens," Working Papers 2019-031, Federal Reserve Bank of St. Louis, revised 08 Sep 2023.
    • Handle: RePEc:fip:fedlwp:2019-031
    DOI: 10.20955/wp.2019.031
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    References listed on IDEAS

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    Cited by:

    1. Jesse LaBelle & Ana Maria Santacreu, 2021. "Technology Transfer and Regional Trade Agreements," Economic Synopses, Federal Reserve Bank of St. Louis, issue 23, pages 1-2, September.

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    More about this item

    Keywords

    technology diffusion; royalty payments; intellectual property rights;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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