Environmental Regulation and the Cross-Border Diffusion of New Technology: Evidence from Automobile Patents
53 Pages Posted: 14 Feb 2012 Last revised: 13 Jul 2015
Date Written: February 14, 2012
We examine the impact of environmental regulation on the international diffusion of new technology through the patent system. We employ a dataset of automobile emission standards between 1992 and 2007 and corresponding data on cross-border patent inflows of technologies developed to comply with these standards. Our analysis, based on a research design of country pair years, shows it is “regulatory distance” between countries rather than absolute regulatory stringency per se that matters for cross-border patent inflows: the flow of compliance technologies rises when regulatory standards in the inventor and the recipient countries become “closer”.
Keywords: pollution control technologies, environmental regulation, international technology diffusion
JEL Classification: O33, Q53, Q55
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