Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282478 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10790
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
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.
Subjects: 
patent rights
innovation
export performance
trade
market protection
asymmetric information
signaling
JEL: 
F10
F14
O30
O31
O34
Document Type: 
Working Paper
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