How do intercultural proximity and social fragmentation promote international patent cooperation?

Joint innovation across countries plays a vital role in international networks of knowledge-intensive businesses. We study how the cultural backgrounds of collaborators influence success in international innovation. Intercultural proximity implies shared values and norms that can engender trust and cooperation in innovation. However, social fragmentation can induce conflict and mistrust, whereas joint innovation can progress through the tolerance and acceptance of different views. Our gravity model analysis of international patent cooperation data shows that social fragmentation complements intercultural proximity along the social identity dimensions of religion, ethnicity, and language to promote joint innovation. Intercultural proximity operates through trust, especially for countries with weak intellectual property rights laws, while social fragmentation operates through tolerance and acceptance, especially for countries with strong IPR laws. Economic strength, trade, and institutional differences are also important predictors of collaborative innovation. We confirm that geographical distance between countries lowers cooperation, but it cannot explain away the positive effects of intercultural proximity and social fragmentation.