This paper assesses whether, how, and to what extent U.S. exports are sensitive to national differences in patent rights. I estimate bilateral trade equations that account for trade distortions related to patent rights using data on state-to-country manufacturing exports in 1992. I find that weak patent rights are a barrier to U.S. exports, but only to countries that pose a strong threat-of-imitation (e.g. China). The stronger patent rights required under the WTO agreement increase U.S. exports to these high-threat markets. Alternatively, strengthening patent rights in countries that pose a weak threat-of-imitation reinforces monopoly power and reduces U.S. exports to these markets.
Bibliographical noteFunding Information:
This research has benefited from helpful comments by Keith E. Maskus, Walter G. Park, Stacie E. Beck, and two anonymous referees. R. Kurt Burch provided valuable editorial comments. Seed monies for this research were provided by the University of Delaware, General University Research Program.
- Commercial policy
- International law
- Patent rights