Omnia Juncta in Uno: Foreign Powers and Trademark Protection in Shanghai’s Concession Era

85 Pages Posted: 23 Nov 2021 Last revised: 1 Dec 2022

See all articles by Laura Alfaro

Laura Alfaro

Harvard University

Cathy Ge Bao

University of International Business and Economics (UIBE)

Maggie Xiaoyang Chen

George Washington University; George Washington University

Junjie Hong

University of International Business and Economics (UIBE) - School of International Trade and Economics

Claudia Steinwender

Ludwig Maximilian University of Munich (LMU)

Date Written: November 2022

Abstract

We investigate how firms and markets adapt to trademark protection, an extensively used but underexamined form of IP protection to address asymmetric information, by exploring a historical precedent: China’s trademark law of 1923. Exploiting unique, newly digitized firm-employee and firm-agent datasets from Shanghai in 1872–1941, we show that the trademark law, established as an unanticipated and Western-disapproved response to end foreign privileges in China, shaped firm dynamics and relationships on all sides of trademark conflicts. Western firms with greater dependence on trademark protection grew and raised brand investment, while Japanese businesses, most frequently accused of counterfeiting, contracted despite attempts to build their own brands. The trademark law also fostered relationships with domestic intermediaries, both within and outside the boundaries of Western firms, and the growth of the Chinese intermediary sector. At the market level, the trademark law did not reduce competition or raise brand prices, leading to a coexistence of trademarks and competitive markets and ultimately gains in consumer welfare. A comparison with previous attempts by foreign powers—such as extraterritorial rights and bilateral treaties—shows that the alternative institutions were broadly unsuccessful.

Keywords: trademark, firm dynamics, intermediaries, intellectual property institutions

JEL Classification: F2, D2, O1, O3, N4

Suggested Citation

Alfaro, Laura and Bao, Cathy Ge and Chen, Maggie Xiaoyang and Chen, Maggie Xiaoyang and Hong, Junjie and Steinwender, Claudia, Omnia Juncta in Uno: Foreign Powers and Trademark Protection in Shanghai’s Concession Era (November 2022). Harvard Business School BGIE Unit Working Paper No. 22-030, Available at SSRN: https://ssrn.com/abstract=3968998 or http://dx.doi.org/10.2139/ssrn.3968998

Laura Alfaro (Contact Author)

Harvard University ( email )

Cambridge, MA 02138
United States

Cathy Ge Bao

University of International Business and Economics (UIBE)

10, Huixin Dongjie
Changyang District
Beijing, Beijing 100029
China

Maggie Xiaoyang Chen

George Washington University ( email )

Department of Economics, George Washington Univ.
1922 F Street, Suite 208, NW
Washington, DC 20052
United States
(202) 994-0192 (Phone)
(202) 994-6147 (Fax)

HOME PAGE: http://home.gwu.edu/~xchen

George Washington University ( email )

Department of Economics, George Washington Univ.
1922 F Street, Suite 208, NW
Washington, DC 20052
United States
(202) 994-0192 (Phone)
(202) 994-6147 (Fax)

HOME PAGE: http://home.gwu.edu/~xchen

Junjie Hong

University of International Business and Economics (UIBE) - School of International Trade and Economics ( email )

10 East Huixin Street
Chaouang District
Beijing, 100029
China

Claudia Steinwender

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

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