International Patenting, Patent Rights, and Technology Gaps

Abstract

International patenting activity is a source of international technology diffusion. However, technology diffuses imperfectly and technology gaps exist between nations. Indeed patenting activity is largely concentrated in developed countries. A gap also exists in patent protection levels across countries, being weak in largely developing countries. Hence this paper studies the extent to which the strengthening and harmonization of patent rights would stimulate international patenting and help narrow technology gaps. International total factor productivity (TFP) differences are used as measures of technology gaps. The paper develops and estimates a model of international patenting and TFP behavior using a panel data set of 44 countries, developed and developing, over the period 1975 - 2005. Of these countries, 25 of them will serve as ‘source countries’ (i.e., the source of technologies). Overall, however, the paper finds that international patent reforms (even those that involve major regime changes) have relatively modest effects on the technology gap between developed and developing nations.