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International patent protection and trade: Transaction-level evidence

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  • de Rassenfosse, Gaétan
  • Grazzi, Marco
  • Moschella, Daniele
  • Pellegrino, Gabriele

Abstract

We report a hitherto undocumented causal mechanism of how patent protection affects exports. The empirical analysis leverages unique data on the worldwide patenting and exporting activities at the product level for the universe of French firms. Exploiting heterogeneity of patent coverage within firm–product–country destinations, we find evidence of a patent premium. Goods protected by patents in a destination country are associated with higher export quantities, ceteris paribus. The effect ranges between four and eleven percent. The causality of the finding is confirmed using rejected patent applications, which are exogenous to the firm. Exports collapse when firms lose patent protection.

Suggested Citation

  • de Rassenfosse, Gaétan & Grazzi, Marco & Moschella, Daniele & Pellegrino, Gabriele, 2022. "International patent protection and trade: Transaction-level evidence," European Economic Review, Elsevier, vol. 147(C).
    • Handle: RePEc:eee:eecrev:v:147:y:2022:i:c:s0014292122000897
    DOI: 10.1016/j.euroecorev.2022.104160
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    2. Liu, Duan & Wang, Qiuhong & Wang, Aidi & Yao, Shujie, 2023. "Export profitability and firm R&D: on China's export diversification under trade war," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 151-166.
    3. Di Fan & Long Zhao, 2023. "The role of business locations in international patenting," Journal of Economics, Springer, vol. 139(1), pages 43-69, June.
    4. Gaétan de Rassenfosse & Emilio Raiteri & Rudi Bekkers, 2023. "Discrimination in the Patent System: Evidence from Standard-Essential Patents," Journal of Law and Economics, University of Chicago Press, vol. 66(4), pages 739-763.
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    More about this item

    Keywords

    Export; Patents; Products; Intellectual property rights; Innovation;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • 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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