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Cross-border Patenting and the Margins of International Trade

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Abstract

This paper investigates the impact of cross-border patenting on the margins of international trade using disaggregated data on international patenting and trade flows. We develop a theoretical framework of trade and firms' patenting decisions that motivates our empirical analysis. The main results reveal that cross-border patenting has a larger effect on the extensive margin of trade compared to the intensive margin. This finding suggests that firms tend to seek patent protection in international markets prior to entering those markets with new products, rather than with their existing products.

Suggested Citation

  • Immaculada Martinez-Zarzoso & Ana Maria Santacreu, 2024. "Cross-border Patenting and the Margins of International Trade," Working Papers 2024-028, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlwp:98864
    DOI: 10.20955/wp.2024.028
    Note: Publisher DOI: https://doi.org/10.1111/roie.12785
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    References listed on IDEAS

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    1. Yotov, Yoto V., 2012. "A simple solution to the distance puzzle in international trade," Economics Letters, Elsevier, vol. 117(3), pages 794-798.
    2. Eric W. Bond & Kamal Saggi, 2023. "Compulsory licensing, price controls, and access to patented foreign products," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 19, pages 437-448, World Scientific Publishing Co. Pte. Ltd..
    3. Robert J. R. Elliott & Liza Jabbour & Enrico Vanino, 2020. "Innovation and the Creative Destruction of Trade: A Study of the Intensive and Extensive Margins of Trade for French Firms," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 180-208, February.
    4. Wei-Chih Chen, 2013. "The Extensive and Intensive Margins of Exports: The Role of Innovation," The World Economy, Wiley Blackwell, vol. 36(5), pages 607-635, May.
    5. Santacreu, Ana Maria, 2015. "Innovation, diffusion, and trade: Theory and measurement," Journal of Monetary Economics, Elsevier, vol. 75(C), pages 1-20.
    6. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
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    Keywords

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    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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