Tickets to the global market: First US patent awards and Chinese firm exports

Robin Kaiji Gong, Yao Li, Kalina Manova and Stephen Teng Sun

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We investigate how international patent activity enables firms from emerging economies to thrive in the global marketplace. We match Chinese customs data to US patent records and leverage the quasi-random assignment of USPTO patent examiners to identify the causal effect of a US patent grant on the subsequent export performance of Chinese firms. Successful first-time patent applicants achieve significantly higher export growth, compared to otherwise similar first-time applicants that failed. This effect operates only in small part through market protection for technologically patent-related products in the US and is largely driven by expansion in other markets. The response across destinations and products reveals that a US patent award signals the Chinese firm's capacity to produce high-quality products and credibility to honor contracts, mitigating information frictions in international trade. There is little evidence for the relaxation of financial constraints or the promotion of follow-on innovation.

Keywords: patent rights; innovation; export performance; trade; market protection; asymmetric information; signalling (search for similar items in EconPapers)
Date: 2023-11-21
New Economics Papers: this item is included in nep-cfn, nep-cna, nep-ifn, nep-ino, nep-int, nep-ipr and nep-sbm
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https://cep.lse.ac.uk/pubs/download/dp1962.pdf (application/pdf)

Related works:
Working Paper: Tickets to the Global Market: First US Patent Awards and Chinese Firm Exports (2023)
Working Paper: Tickets to the Global Market: First US Patent Awards and Chinese Firm Exports (2023)
Working Paper: Tickets to the global market: first US patent awards and Chinese firm exports (2023)
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