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

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

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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)
JEL-codes: F10 F14 O30 O31 O34 (search for similar items in EconPapers)
Pages: 75 pages
Date: 2023-11-21
New Economics Papers: this item is included in nep-int, nep-ipr and nep-sbm
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Downloads: (external link)
http://eprints.lse.ac.uk/121375/ Open access version. (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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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:121375

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