Pamela J. Smith

How do foreign patent rights affect U.S. exports, affiliate sales, and licenses?

Abstract This paper analyzes how foreign patent rights (FPRs) affect US exports, affiliate sales, and licenses. Our approach is distinctive in three ways. We apply ownership, location, and internalization concepts to link FPRs with servicing decisions. We account for the simultaneity of servicing decisions. We estimate the relative effects of FPRs on exports, affiliate sales, and licenses. Empirical findings show strong FPRs increase US affiliate sales and licenses, particularly across countries with strong imitative abilities. Further, FPRs have a larger effect on US knowledge transferred outside the country and firm, relative to knowledge located inside the country and internalized inside the firm.

Are Weak Patent Rights a Barrier to U.S. Exports

Many of the recent agreements to strengthen intellectual property rights have been formulated within the context of international trade policy. Yet, there is scant economic research to support this linking of intellectual property rights with trade. This paper addresses this issue by providing empirical evidence on the effects of national patent rights on U.S. exports. The hypothesis is that U.S. exports depend on the strength of patent rights in importing countries; the direction of the relationship depends on the importers level of development and regional market conditions. To assess this hypothesis, bilateral trade equations of both the Helpman-Krugman and Gravity models are estimated using cross section data on the manufacturing exports of the U.S. states to foreign destinations in 1992. The findings show that state exports are positively related to patent rights in emerging less developed countries and are negatively related to patent rights in the poorest developing countries and wealthiest developed countries. Also, states tend to export more to countries in Europe, Asia, South America, and Oceania that have strong patent rights, and states export less to countries in North America that have strong patent rights.

Patent Rights and Trade: Analysis of Biological Products, Medicinals and Botanicals, and Pharmaceuticals

This article analyzes the effects of foreign patent rights on U.S. bilateral exports. The empirical analysis covers three highly disaggregated drug industries over three decades. We estimate bilateral trade equations for each industry using cross-country data on the strength of national patent rights. The findings show that strong foreign patent rights enhance the market power of U.S. drug exporters across countries with weak imitative abilities. Alternatively, strong foreign patent rights stimulate the market expansion of U.S. drug exports across countries with strong imitative abilities. These effects are larger in magnitude during the 1980–90s relative to the 1970s. Copyright 2002, Oxford University Press.

Needed: models of biotechnology intellectual property

Although never uncontroversial, intellectual property rights in biotechnological innovation are once more the focus of intense debate. The debate has yet to reach any result, largely because of several important errors in the way that various disciplines approach it. These errors include making assumptions without empirical basis and conflating various intellectual property regimes. What is needed is a transdisciplinary integrated method to correct these errors. Such a method can be implemented through the construction of alternative models of intellectual property protection designed to balance the various social, ethical and economic constraints that affect biotechnology.

Do Geographic Scale Economies Explain Disturbances to Heckscher-Ohlin Trade?

This paper examines whether geographic scale economies explain the trade that remains unexplained by the Heckscher-Ohlin model. The paper develops a theoretical specification that integrates geographic scale economies into the Heckscher-Ohlin model, and develops a statistical method for detecting geographic scale economies in the distributional features of a disturbance term. The units of analysis are US states. The findings reveal that empirical support for the Heckscher-Ohlin theory is improved by accounting for geographic scale economies within states; geographic scale economies do not generate differences in Rybczynski effects across states; and the scope of geographic scale economies is contained within states. Copyright 1999 by Blackwell Publishing Ltd.

Are GMO policies "trade related"? Empirical analysis of Latin America

This paper empirically examines whether GMO policies are “trade related” for countries in Latin America (LA). First, we use the Balassa index to assess the “revealed comparative advantage” of LA countries. We find that LA countries have a revealed comparative advantage in GMO industries relative to the world, and that intra‐regional trade in these industries is modest relative to external trade. Second, we estimate the Gravity model to examine the effects of importers’ GMO policies on Argentina and Brazils bilateral exports of soybeans and maize. We find that strong GMO policies in importers have a negative effect on Argentinas bilateral exports of soybeans (an industry and country with historically high GMO content). Further, we find that past GMO policies are a strong determinant of Argentinas future bilateral exports, and that the negative trade effects of strong GMO policies are increasing over time. In contrast, we find a weaker relationship between the GMO policies of importers and Brazils bilateral exports (consistent with Brazils more recent increases in GMO content). These findings for Argentina and Brazil provide a benchmark for other developing countries that are looking for guidance on servicing trading partners with diverse GMO policies.

International patterns of intellectual property protection and commodity trade: An economic perspective

This article provides an economic perspective on the cross-country patterns of intellectual property protection and commodity trade, and the linkages between these patterns. The objectives are to describe the characteristics of countries in relation to the strength of their intellectual property protection and to describe the relationship between the strength of country protection of intellectual property and U.S. exports to these countries. An economic framework for thinking about these relationships is provided, and data are examined for their consistency with the economic interpretations. Findings show that country protection of intellectual property is positively related to the level of country development and that U.S. bilateral exports are positively related to the strength of intellectual property protection in the recipient importing country.

Determinants of Comparative Advantage in GMO Intensive Industries

This paper examines the supply-side determinants of international trade in crops that are intensive in genetically modified organisms (GMOs). The theoretical framework is a variant of the Heckscher–Ohlin model, which we estimate using cross-country data for 1995 and 2010 to examine soybeans, maize, and cotton trade. The data include measures of country land endowments, which we disaggregate into GMO and non-GMO components, as well as recently released measures of GMO regulations. Findings show land endowments are a primary source of comparative advantage in GMO intensive industries before and after the advent of GMOs. Further, an increase in a countrys allocation of land to GMO crops has a positive effect on her net exports in GMO intensive industries. This positive effect occurs both across countries and time. Finally, a countrys GMO regulations have a negligible effect as a supply-side determinant of comparative advantage. However, a countrys decision about whether to adopt GMO technologies does matter to trade. These findings are robust with respect to a variety of considerations.