The role of business locations in international patenting

Despite the importance of international patenting in understanding technology diffusion across countries, it is unclear how business locations affect firms’ international patenting behavior. This paper investigates the impact of business locations on international patenting using data from the Management, Organization and Innovation survey 2009 with a representative sample of 1508 firms from twelve countries. Several findings emerge from our analyses. First, firms outsourcing abroad tend to patent abroad but not at home. Second, firms are more likely to patent at home when facing foreign competitors. Third, when facing domestic competitors, firms are less likely to apply for patents. These findings imply that firms use patents to compete against foreign competitors.