Cross-Border Institutions and the Globalization of Innovation

92 Pages Posted: 1 Jan 2020 Last revised: 24 Jul 2023

See all articles by Bo Bian

Bo Bian

University of British Columbia

Jean-Marie Meier

The Wharton School, University of Pennsylvania; University of Texas at Dallas - Naveen Jindal School of Management

Ting Xu

University of Toronto, Rotman School of Management

Date Written: July 19, 2023

Abstract

We identify strong cross-border institutions 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 and contract enforcement, we show that signatory countries increase technology adoption and sourcing from each other; they also increase R&D collaborations. Consistent with BITs reducing investment frictions, the results are particularly strong for process innovation and for countries with weak domestic institutions. Increases in foreign investments with high frictions, such as inter-firm investments in R&D-intensive sectors, drive these results.

Keywords: Innovation, technology diffusion, globalization, cross-border institutions, bilateral investment treaties

JEL Classification: F21, F61, G18, G38, K33, O31, O33

Suggested Citation

Bian, Bo and Meier, Jean-Marie and Xu, Ting, Cross-Border Institutions and the Globalization of Innovation (July 19, 2023). LawFin Working Paper No. 23, Available at SSRN: https://ssrn.com/abstract=3503092 or http://dx.doi.org/10.2139/ssrn.3503092

Bo Bian

University of British Columbia ( email )

HA 865, UBC Sauder School of Business
2053 Main Mall, Vancouver, BC V6T 1Z2
Vancouver, British Columbia V6T 1Z2
Canada

HOME PAGE: http://bo-bian.com/

Jean-Marie Meier

The Wharton School, University of Pennsylvania ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

HOME PAGE: http://www.jean-mariemeier.com

University of Texas at Dallas - Naveen Jindal School of Management ( email )

Jindal School of Management
800 W. Campbell Road
Richardson, TX 75080
United States

HOME PAGE: http://www.jean-mariemeier.com/

Ting Xu (Contact Author)

University of Toronto, Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

HOME PAGE: http://https://sites.google.com/site/tingxu4

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
583
Abstract Views
4,105
Rank
84,506
PlumX Metrics