TY  - JOUR
AU  - Eaton,Jonathan
AU  - Kortum,Samuel
TI  - International Patenting and Technology Diffusion
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4931
PY  - 1994
Y2  - November 1994
UR  - http://www.nber.org/papers/w4931
L1  - http://www.nber.org/papers/w4931.pdf
N1  - Author contact info:
Jonathan Eaton
Department of Economics
Penn State University
608 Kern Graduate Building
University Park, PA 16802-3306
Tel: (814) 865 - 8871
Fax: (814) 863 - 4775
E-Mail: jxe22@psu.edu

Samuel S. Kortum
Department of Economics
Yale University
P.O. Box 208264
New Haven, CT 06520
Tel: 773/702-8251
Fax: 773/702-8490
E-Mail: kortum@uchicago.edu
AB  - We model the invention of new technologies and their diffusion across countries.  Our model predicts that, eventually, all countries will grow at the same rate, with each country's productivity ranking determined by how rapidly it adopts inventions.  The common growth rate depends on research efforts in all countries, while research effort is determined by how much inventions earn at home and abroad. Patents affect the return to invention.  We relate the decision to patent an invention internationally to the cost of patenting in a country and to the expected value of patent protection in that country.  We can thus infer the direction and magnitude of the international diffusion of technology from data on international patenting, productivity, and research.  We fit the model to data from the five leading research economies.  The parameters indicate how much technology flows between these countries and how much each country earns from its inventions domestically and elsewhere.  Our results imply that foreign countries are important sources of technology even though countries earn most of their return to innovation at home.  For example, about half of U.S. productivity growth derives from foreign technology yet U.S. investors earn 98 per cent of the revenue from their inventions domestically.
ER  -