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Working Paper
International technology Diffusion: A Gravity Approach
This paper investigates, empirically, the determinants of international technology diffusion. To do that, I set up a multi-country model of innovation and diffusion with perfect enforcement of intellectual property rights (IPR). The model yields a gravity equation for bilateral royalty payments that is estimated using methods from empirical trade. I investigate discrepancies between model’s predictions and observed royalty payments to identify the role of fundamentals vs. other factors such as imperfect IPR protection. Fundamentals account for most of the variation in royalty payments, ...
Working Paper
International Technology Licensing, Intellectual Property Rights, and Tax Havens
This paper investigates the determinants of international technology licensing using data for 61 countries during 1995-2012. A multi-country model of innovation and diffusion with international technology licensing yields a structural gravity equation for royalty payments as a function of fundamentals. The gravity equation is estimated using nonlinear methods. The model’s fundamentals account for 45% of the variation in royalty payments. Other factors such as imperfect IPR protection and tax havens account for a substantial fraction of the unexplained variation. A back-of-the-envelope ...
Intellectual Property Rights Have Become A Key Part of Trade Deals
Developed countries typically require strong IPR provisions to limit imitation and technology leakages in developing economies.
Working Paper
Dynamic Gains from Trade Agreements with Intellectual Property Provisions
I develop a quantitative multi-country trade model of innovation and technology licensing to study short- and long-term effects of trade agreements with intellectual property (IP) provisions. A trade agreement involves determining the level of tariffs and IP protection as Nash bargaining between a developed and a developing country. The agreement increases welfare, innovation, and growth in the long run. However, gains accrue differently across countries along the transition. Developing countries experience short-run losses, as they now pay higher licensing prices. An agreement designed by a ...
Working Paper
International Technology Licensing, Intellectual Property Rights, and Tax Havens
This paper investigates the determinants of international technology licensing using data for 50 countries during 1996-2012. A multi-country model of innovation and international technology licensing yields a dynamic structural gravity equation for royalty payments as a function of fundamentals, including imperfect intellectual property protection and differences in corporate taxation. The gravity equation is estimated with nonlinear methods. The model's fundamentals account for about 60% of the variation in royalty payments. A quantitative analysis sheds light on the impact of global ...
Report
What do drug monopolies cost consumers in developing countries?
This paper quantifies the effects of drug monopolies and low per-capita income on pharmaceutical prices in developing economies using the example of the antiretroviral drugs (ARVs) used to treat HIV.
Working Paper
What Drives International technology Diffusion? A Gravity Approach
We derive a theory-based gravity-type equation that determines the main drivers of international technology diffusion under perfect enforcement of intellectual property rights. We estimate the gravity equation using bilateral royalty payments data for a sample of 53 countries and the period 1995-2012 to infer the amount of technology diffusion predicted by the model. We then analyze differences between the model and the data, and find that they are mainly driven by characteristics of the importing-technology country that are not captured by the model. We explore the role of three channels: ...
Working Paper
International technology Diffusion: A Gravity Approach
We adapt gravity methods from the empirical trade literature to study international technology diffusion in a novel way. First, we derive a theory-based gravity-type equation that describes the main fundamentals of international technology diffusion under perfect enforcement of intellectual property rights (IPR). We then estimate the gravity equation using bilateral royalty payments data—for a sample of 53 countries and the period 1995-2012—to infer the amount of technology diffusion predicted by the gravity model. Differences between the model and the data are mainly driven by ...
Working Paper
Taxation and the Global Allocation of Intangibles
We study how international tax regimes and intellectual property (IP) rights shape the global allocation of intangible assets. Using a new dataset of cross-border patent transactions, we find that tax differentials are a key determinant of intra-firm transfers within multinational companies. Stronger IP rights play a bigger role in inter-firm transactions. To interpret these patterns, we develop a model in which firms choose to license, sell, or profit-shift patents depending on tax wedges and differences in IP protection. The theory rationalizes these findings and highlights how differences ...
Working Paper
International Technology Licensing, Intellectual Property Rights, and Tax Havens
This paper investigates the determinants of international technology licensing using data for 41 countries during 1996-2012. A multi-country model of innovation and international technology licensing yields a dynamic structural gravity equation for royalty payments as a function of fundamentals, including: (i) imperfect intellectual property protection and (ii) tax havens. The gravity equation is estimated using nonlinear methods. The model’s fundamentals account for 56% of the variation in royalty payments. Counterfactual analysis sheds light on the role of intellectual property rights ...