Tickets to the Global Market: First U.S. Patents and Exporting of Chinese Firms – HK Online Trade Seminar Series
Dr. Robin Kaiji Gong
The Hong Kong University of Science and Technology
This paper investigates how the approval of a US patent affects the subsequent performance of Chinese firms in foreign markets. We match Chinese exporters with US patent applicants, and leverage the quasi-random assignment of USPTO applications to examiners to identify the causal effect of US patent grants. Successful first-time patent applicants achieve significantly higher export growth, largely because they retain and expand into incumbent destination-product markets. The response across products and destinations reveals that these effects operate only in small part through the protection of market power in the US, and not through the relaxation of financial frictions or the promotion of follow-on innovation. Instead, evidence indicates that a first US patent award signals the Chinese firm’s capacity to produce high quality and credibility to honor contracts, mitigating information frictions in international trade.
This is a joint seminar organized by HKU, CUHK, City U, HKUST and Lingnan U.
Please contact Xiameng PAN at email@example.com for registration.