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<p>Technology diffusion and spillovers are key drivers of both innovation and economic growth. This paper examines the effects of obtaining initial intellectual property rights on international knowledge flows through new technological entrants, an important yet understudied function of the IP system. We propose a simple theoretical framework which examines exclusivity and proximity effects as countervailing forces acting on the broader diffusion of foreign-developed technology within a host country. Our study provides causal evidence that a foreign technological entrant’s initial patent grant in the host country (the United States) <i>increases</i> the likelihood of international knowledge flows to local U.S. firms and other patenting entities (7.1 percentage points and 29.4 percent, respectively), demonstrating the importance of patent rights in facilitating international knowledge flows beyond the disclosure mechanism. These effects are at least partly driven by sustained presence, cross-country differences in search costs, and voluntary technology sales, but the evidence on inventor mobility is mixed. Overall, initial intellectual property rights appear to mitigate impediments to cross-border knowledge flows in this setting, and the benefits of doing so outweigh the frictions arising from the exclusionary nature of patents.</p>

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Foreign technological entry, intellectual property rights, and technology diffusion: evidence from patent filings at the USPTO

  • 期刊论文

  • 发表日期：

    2026年4月29日

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  • Charles de Grazia,
  • Peter R. Herman,
  • Hwansung Ju

摘要

Technology diffusion and spillovers are key drivers of both innovation and economic growth. This paper examines the effects of obtaining initial intellectual property rights on international knowledge flows through new technological entrants, an important yet understudied function of the IP system. We propose a simple theoretical framework which examines exclusivity and proximity effects as countervailing forces acting on the broader diffusion of foreign-developed technology within a host country. Our study provides causal evidence that a foreign technological entrant’s initial patent grant in the host country (the United States) increases the likelihood of international knowledge flows to local U.S. firms and other patenting entities (7.1 percentage points and 29.4 percent, respectively), demonstrating the importance of patent rights in facilitating international knowledge flows beyond the disclosure mechanism. These effects are at least partly driven by sustained presence, cross-country differences in search costs, and voluntary technology sales, but the evidence on inventor mobility is mixed. Overall, initial intellectual property rights appear to mitigate impediments to cross-border knowledge flows in this setting, and the benefits of doing so outweigh the frictions arising from the exclusionary nature of patents.