Search Results
Working Paper
Cross-border Patenting and the Margins of International Trade
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 ...
Report
The Impact of Brexit on Foreign Investment and Production
In this paper, we estimate the impact of increasing costs on foreign producers following a withdrawal of the United Kingdom from the European Union (popularly known as Brexit). Our predictions are based on simulations of a multicountry neoclassical growth model that includes multinational ?rms investing in research and development (R&D), brands, and organizational capital that are used nonrivalrously by their subsidiaries at home and abroad. For the main simulation, we assume that U.K. investments in the European Union face the same restrictions as Norway?s and that E.U. investments in the ...
Working Paper
Cross-border Patenting and the Margins of International Trade
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 ...
Report
Brand Reallocation and Market Concentration
We study the interaction of customer capital and productivity through brand reallocation across firms. We develop a firm dynamics model with brands as transferable customer capital, heterogeneous firm productivity, and variable markups. We study the matching process between transferable brand capital and core productivity, which can be inefficient with significant welfare implications. We link USPTO trademark data with Nielsen sales data to study the prevalence of brand reallocation and the response of sales and prices to reallocation. Quantitatively, brand reallocation reduces welfare. ...
Working Paper
Cross-border Patenting, Globalization, and Development
We build a stylized model that captures the relationships between cross-border patenting, globalization, and development. Our theory delivers a 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, for 1980-2019. The econometric analysis reveals a strong, positive impact of policy and globalization on cross-border patent flows, especially from North to South. A counterfactual welfare analysis suggests that the increase in patent flows from North to South has benefited both ...
Working Paper
Openness and the Optimal Taxation of Foreign Know-How
Developing countries frequently offer tax incentives and even subsidize the entry and operation of foreign firms. I examine the optimality of such policies in an economy where growth is driven by entrepreneurial know-how, a skill that is continuously updated on the basis of the productive ideas implemented in the country. Openness allows foreign ideas to disseminate inside a country and can foster the country's domestic accumulation of know- how. With externalities, however, laissez-faire openness is suboptimal and can be growth-and even welfare-reducing. I examine the gains from openness ...
Working Paper
Markets, Externalities, and the Dynamic Gains of Openness
Inflows of foreign knowledge are the key for developing countries to catch up with the world technology frontier. In this paper, I construct a simple tractable model to analyze (a) the incentives of foreign firms to bring their know-how to a developing country and (b) the incentives of domestic firms to invest in their own know-how, given the exposure to foreign ideas and competition. The model embeds two diffusion mechanisms typically considered separately in the literature: externalities and markets. The dynamic gains of openness can be substantial under either mechanism, but their relative ...
Working Paper
Cross-border Patenting, Globalization, and Development
We build a stylized model that captures the relationships between cross-border patenting, globalization, and development. Our theory delivers a 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, for 1980-2019. The econometric analysis reveals a strong, positive impact of policy and globalization on cross-border patent flows, especially from North to South. A counterfactual welfare analysis suggests that the increase in patent flows from North to South has benefited both ...
Working Paper
Cross-border Patenting, Globalization, and Development
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, ...
Report
The dual nature of trade: measuring its impact on imitation and growth
Imports of goods that embody foreign technology raise a country's output directly as inputs into production and indirectly through reverse-engineering of these goods, which contributes to domestic imitation and innovation. This paper first quantifies spillovers from high-technology imports from developed countries to domestic imitation and innovation in both developed and developing countries. It then considers the contribution of foreign and domestic innovation to real per capita GDP growth. ; International patent data for forty countries from 1970 to 1985 are used to create proxies for ...