International Patenting and Technology Diffusion.

NBER Working Paper No. 4931 November 1994 JEL Nos. F43, O14, O31 Growth, International Trade and Investment, Productivity

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; 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 within a country, and to the expected value of patent protection in that country. Thus we can infer the direction and magnitude of the international diffusion of technology from...