Do Migrant and Business Networks Promote International Royalty Receipts?

This study examines how migration and business networks affect trade on intellectual property using bilateral data on Japan (or the United States) and the Organisation for Economic Co-operation and Development (OECD) member countries. The analyses are distinct in that they examine network effects comprehensively by combining previous works on tangible trade-migration relationships, together with the literature on trade-foreign direct investment (FDI) relationships. We show that intellectual property exports are positively related with the number of immigrants residing in Japan (or the United States). However, other network effects, specifically business networks, are not necessarily universal because two forces, i.e., network effects and trade-FDI interactions, could operate in opposite directions. We conclude that positive immigration network effects occur, but emigration and business network effects could vary depending on the development stages of intellectual property trade.