nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2024‒01‒08
four papers chosen by
Giovanni Battista Ramello, Università di Turino

  1. Tickets to the Global Market: First US Patent Awards and Chinese Firm Exports By Robin Kaiji Gong; Yao Amber Li; Kalina Manova; Stephen Teng Sun; Kalina B. Manova
  2. Institutions, Development, and Patterns of Trade By Andrea Greppi; Alireza Naghavi
  3. Endogenous innovation scale and patent policy in a monetary Schumpeterian growth model By Yu, Po-yang; Lai, Ching-Chong
  4. Multibrand price dispersion By Armstrong, Mark; John, Vickers

  1. By: Robin Kaiji Gong; Yao Amber Li; Kalina Manova; Stephen Teng Sun; Kalina B. Manova
    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, signaling
    JEL: F10 F14 O30 O31 O34
    Date: 2023
  2. By: Andrea Greppi (OECD); Alireza Naghavi (University of Bologna, Department of Economics)
    Abstract: This study investigates how easing international transactions through im- proved legal institutions can result in divergent trade patterns for different economies. We provide evidence that the level of development governs the relevance of intellectual property rights (IPR) institutions in determining a country’s comparative advantage. While IPR protection changes the composi- tion of OECD exports towards IP-intensive sectors, contract enforcement is the key driver of specialization of non-OECD exports in relation-specific inputs. The findings suggest a concentration of innovation activities in the OECD, with non-OECD countries serving as potential outsourcing destinations. We exploit information on IPR reforms over time to show the robustness of our results through both an instrumental variable and a difference-in-difference approach. We extend the analysis to a bilateral framework to show that better IPR quality could nevertheless encourage technology transfer by encouraging imports of IP-intensive goods into non-OECD countries.
    JEL: F13 F14 F63 O34 D23
    Date: 2022–12–12
  3. By: Yu, Po-yang; Lai, Ching-Chong
    Abstract: This paper develops a monetary R&D-driven endogenous growth model featuring endogenous innovation scales and the price-marginal cost markup. To endogenize the step size of quality improvement, we propose a trade-off mechanism between the risk of innovation failure and the benefit of innovation success in R&D firms. Several findings emerge from the analysis. First, a rise in the nominal interest rate decreases economic growth; however, its relationship with social welfare is ambiguous. Second, either strengthening patent protection or raising the professional knowledge of R&D firms leads to an ambiguous effect on economic growth. Third, the Friedman rule of a zero nominal interest rate fails to be optimal in view of the social welfare maximum. Finally, our numerical analysis indicates that the extent of patent protection and the level of an R&D firm’s professional knowledge play a crucial role in determining the optimal interest rate.
    Keywords: intellectual property rights; economic growth; endogenous innovation scales; endogenous markups; inflation
    JEL: E41 L11 O30 O40
    Date: 2022–10–17
  4. By: Armstrong, Mark; John, Vickers
    Abstract: We study a market in which several firms potentially each supply a number of "brands" of fundamentally the same product. In fashion, for example, a single firm might retail similar items under different labels and different prices. Consumers differ in which products they consider for their purchase, and firms compete using (multi-dimensional) mixed pricing strategies for their brands. Using relative elasticity conditions, we discuss when firms choose to offer uniform pricing across their brands, and when they use segmented pricing so that one "discount" brand is always priced below another. We solve duopoly models in which equilibria can be derived for all parameters. We discuss the impact of introducing a new brand, of imposing a requirement to set uniform prices across a firm's brands, and of mergers between single-brand firms.
    Keywords: Price competition, consideration sets, multiproduct firms, multibranding, price discrimination, price dispersion, brand proliferation
    JEL: C72 D42 D43 L13 M31
    Date: 2023–11

This nep-ipr issue is ©2024 by Giovanni Battista Ramello. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.