Cross-Border Institutions and the Globalization of Innovation

We identify strong cross-border institutions as a driver of the globalization of innovation. Using 67 million patents from over 100 patent offices, we introduce novel measures of innovation diffusion and collaboration. Exploiting staggered bilateral investment treaties as shocks to cross-border property rights and contract enforcement, we show that signatory countries increase technology adoption and sourcing from each other; they also increase R&D collaborations. These interactions result in technological convergence. The effects are particularly strong for process innovation, and for countries that are technological laggards or have weak domestic institutions. The mobility of financial and human capital are the key channels.

• Publication year

  2020

• Venue

  Social Science Research Network

• Publication date

  2020-04-01

• Fields of study

  Business, Economics

• Identifiers
  DOI 10.2139/ssrn.3503092
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• The Tacit Dimension

  2021cited by this paper
• Exchanges of innovation resources inside venture capital portfolios

  2020cited by this paper
• Spatial Diffusion

  2020cited by this paper
• Designing an International Economic Order: A Research Agenda

  2020cited by this paper
• Globally Consistent Creditor Protection, Reallocation, and Productivity

  2020cited by this paper
• Redrawing the Map of Global Capital Flows: The Role of Cross-Border Financing and Tax Havens

  2020influential reference
• Global Investment Competitiveness Report 2019/2020: Rebuilding Investor Confidence in Times of Uncertainty

  2020influential reference
• Immigration, Innovation, and Growth

  2020cited by this paper
• Unobservable Selection and Coefficient Stability: Theory and Evidence

  2019influential reference
• Intellectual Property Rights in International Investment Agreements

  2019cited by this paper
• What is Real and What is Not in the Global FDI Network?

  2019cited by this paper
• Globalization and the Geography of Capital Flows

  2019cited by this paper
• International Business Travel and Technology Sourcing

  2019influential reference
• Protecting Innovation Through Patents and Trade Secrets: Evidence for Firms with a Single Innovation

  2019influential reference
• Technology Conglomeration, Strategic Alliances, and Corporate Innovation

  2019influential reference
• Financial Development and Technology Diffusion

  2019cited by this paper
• Why Countries Sign Bilateral Labor Agreements

  2018cited by this paper
• Costs and Benefits of Investment Treaties: Practical Considerations for States

  2018cited by this paper
• Financial Contracting for Innovation: Property Rights in Action

  2018cited by this paper
• Foreign Direct Investment and Knowledge Diffusion in Poor Locations: Evidence from Ethiopia

  2018cited by this paper
• Measuring Technological Innovation over the Long Run

  2018cited by this paper
• Frontier Knowledge and Scientific Production: Evidence from the Collapse of International Science

  2018cited by this paper
• Global Collaborative Patents

  2018influential reference
• Knowledge Transfer Abroad: The Role of U.S. Inventors within Global R&D Networks

  2018cited by this paper
• Dancing with the Stars: Innovation Through Interactions

  2018cited by this paper
• Missing Novelty in Drug Development

  2018cited by this paper
• Exchange Arrangements Entering the 21st Century: Which Anchor Will Hold?

  2017cited by this paper
• Deglobalization: The Rise of Disembedded Unilateralism

  2017cited by this paper
• Sharing R&D Investments in Breakthrough Technologies to Control Climate Change

  2017cited by this paper
• The Political Economy of the Investment Treaty Regime

  2017influential reference
• Regulatory Integration of International Capital Markets

  2017cited by this paper
• Killer Acquisitions ∗

  2017cited by this paper
• The political motivations of the United States’ bilateral investment treaty program

  2016cited by this paper
• Capital-Market Effects of Securities Regulation: Prior Conditions, Implementation, and Enforcement

  2016cited by this paper
• Patents and the Global Diffusion of New Drugs.

  2016cited by this paper
• The Effects of Greenfield FDI and Cross‐border M&As on Total Factor Productivity

  2016cited by this paper
• Immigration, International Collaboration, and Innovation: Science and Technology Policy in the Global Economy

  2015cited by this paper
• Bounded Rationality and Economic Diplomacy: The Politics of Investment Treaties in Developing Countries

  2015cited by this paper
• The Rise of International Co-invention

  2015cited by this paper
• The Global Diffusion of Ideas∗

  2015cited by this paper
• The Increasing Dominance of Teams in Production of Knowledge

  2014cited by this paper
• International research networks in pharmaceuticals: Structure and dynamics

  2014cited by this paper
• Bounded Rationality and the Diffusion of Modern Investment Treaties

  2014cited by this paper
• Firm Boundaries Matter: Evidence from Conglomerates and R&D Activity

  2014cited by this paper
• Technological Innovation , Resource Allocation and Growth ∗

  2014cited by this paper
• Corporate Innovations and Mergers and Acquisitions: Corporate Innovations and Mergers and Acquisitions

  2014cited by this paper
• Ethnic Innovation and U.S. Multinational Firm Activity

  2013cited by this paper
• German Jewish émigrés and US invention

  2013cited by this paper
• Dyadic Analysis in International Relations: A Cautionary Tale

  2012cited by this paper
• The Spatial Diffusion of Technology

  2012cited by this paper
• international technology diffusion

  2012cited by this paper
• The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration

  2011cited by this paper
• Capital-Market Effects of Securities Regulation : The Role of Prior Regulation , Implementation and Enforcement *

  2011cited by this paper
• Notes on CEPII’s distances measures: The GeoDist database

  2011cited by this paper
• The Protection of Intellectual Property Rights through Bilateral Investment Treaties: Is there a TRIPS-plus Dimension?

  2010cited by this paper
• Intellectual Property Rights in International Investment Agreements: An Overview

  2010cited by this paper
• Stylized Facts in the Geography of Innovation

  2010cited by this paper
• What Lies Beneath the Euro's Effect on Financial Integration? Currency Risk, Legal Harmonization, or Trade?

  2010cited by this paper
• Financial Regulation, Financial Globalization and the Synchronization of Economic Activity

  2009influential reference
• Foreign Direct Investment and Bilateral Investment Treaties an International Political Perspective

  2009cited by this paper
• International joint venture partner selection: The role of the host-country legal environment

  2009cited by this paper
• Governance Matters VIII: Aggregate and Individual Governance Indicators, 1996-2008

  2009cited by this paper
• The Supply Side of Innovation : H-1 B Visa Reforms and US Ethnic Invention

  2008cited by this paper
• Blurring Firm Boundaries: The Role of Venture Capital in Strategic Alliances

  2008cited by this paper
• How and By How Much does Foreign Direct Investment Increase the Productivity of Domestic Firms

  2008cited by this paper
• Why Doesn't Capital Flow from Rich to Poor Countries? An Empirical Investigation

  2008cited by this paper
• Strategic Alliances and the Boundaries of the Firm

  2008cited by this paper
• Welfare gains from Foreign Direct Investment through technology transfer to local suppliers

  2008cited by this paper
• Contracts and Technology Adoption

  2007cited by this paper
• Ethnic Scientific Communities and International Technology Diffusion

  2007cited by this paper
• Do alliances promote knowledge flows

  2006cited by this paper
• Do Stronger Intellectual Property Rights Increase International Technology Transfer? Empirical Evidence from U.S. Firm-Level Panel Data

  2006cited by this paper
• Technology Transfer and Spillovers in International Joint Ventures

  2006influential reference
• The Log of Gravity

  2006cited by this paper
• How Special Is the Special Relationship ? Using the Impact of U . S . R & D Spillovers on U . K . Firms as a Test of Technology Sourcing

  2006cited by this paper
• What Matters for Financial Development? Capital Controls, Institutions, and Interactions

  2005cited by this paper
• Property Rights and the International Organization of Production

  2005cited by this paper
• Identifying Technology Spillovers and Product Market Rivalry

  2005cited by this paper
• Do bilateral investment treaties increase foreign direct investment to developing countries

  2005cited by this paper
• Multinational Enterprises, International Trade, and Productivity Growth: Firm-Level Evidence from the United States

  2003influential reference
• Do Stronger Intellectual Property Rights Increase International Technology Transfer ? Empirical Evidence from U . S . Firm-Level Panel Data

  2003cited by this paper
• Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages

  2002cited by this paper
• Knowledge flows within multinational corporations

  2000cited by this paper
• Trade , Foreign Direct Investment , and International Technology Transfer : A Survey *

  2000cited by this paper
• Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela

  1999influential reference
• International Technology Diffusion: Theory and Measurement

  1999cited by this paper
• Trade and the Transmission of Technology

  1997cited by this paper
• Patent Policy and the Direction of Technological Change

  1996cited by this paper
• The globalisation of technology: a new taxonomy

  1995cited by this paper
• Technology Transfer by Multinational Firms: The Resource Cost of Transferring Technological Know-How

  1977cited by this paper

• Digital connectivity, institutional strength and innovation governance: evidence from 65 countries, 2010–2023

  2026cites this paper
• Mapping U.S.-China Technology Decoupling: Policies, Innovation, and Firm Performance

  2024cites this paper
• Bridging Innovation Distances: High‐Speed Rail and Patent Agency Utilization in China

  2024cites this paper
• Mapping U.S.-China Technology Decoupling, Innovation, and Firm Performance ∗ Measuring technology decoupling and dependence between the U.S.-China Technology Decoupling, Innovation, and Firm Performance”

  2021influential citation
• Did Western CEO Incentives Contribute to China’s Technological Rise?

  2021cites this paper
• FORMATION AND IMPLEMENTATION OF INNOVATION POLICY OF CROSS-BORDER REGIONS

  2021cites this paper
• Tax Avoidance through Cross-Border Mergers and Acquisitions

  2020cites this paper