Working Paper Revision

Cross-border Patenting, Globalization, and Development


Abstract: We build a quantitative model that captures the relationships between cross-border patenting, globalization, and development. Our theory delivers a ‘structural gravity’ equation for cross-border patents. To test the model’s predictions, we compile a new dataset that tracks patents within and between countries and industries over time. The econometric analysis reveals a strong, positive impact of policy and globalization on cross-border patent flows between 1995 and 2018, especially from North to South. A counterfactual analysis shows these North-to-South flows benefited both regions, with larger gains in the South, especially after 2000, thus reducing global income inequality.

Keywords: cross-border patents; gravity; policy; globalization; development;

JEL Classification: F63; O14; O33; O34;

https://doi.org/10.20955/wp.2023.031

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Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2024-06

Number: 2023-031

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