Journal of Financial and Quantitative Analysis Vol. 60 No. 5 2025

Cross-Border Property Rights and the Globalization of Innovation

Bo Bian¹; Jean-Marie Meier²; Ting Xu^3,4

¹ University of British Columbia Sauder School of Business · ² University of Texas at Dallas Jindal School of Management · ³ University of Toronto Rotman School of Management, · ⁴ National Bureau of Economic Research

Abstract

We identify strong cross-border property rights as a driver for the globalization of innovation. Using 67 million patents from over 100 patent offices, we construct novel measures of the three stages of innovation diffusion: adoption, sourcing, and collaboration. Exploiting staggered bilateral investment treaties (BITs) as shocks to cross-border property rights, we show that signatory countries increase technology adoption and sourcing from each other; they also increase R&D collaborations. The results are particularly strong for countries with weak domestic institutions and technologies with high imitation risks. Increases in R&D-related foreign investments explain most of the results.

DOI

10.1017/s0022109024000735

Volume

60

Issue

5

Pages

2159-2193

Language

en

Sources

openalex bibtex:phds-export.bib crossref

Cite

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