Are weak patent rights a barrier to U.S. exports?

Abstract

This paper assesses whether, how, and to what extent U.S. exports are sensitive to national differences in patent rights. I estimate bilateral trade equations that account for trade distortions related to patent rights using data on state-to-country manufacturing exports in 1992. I find that weak patent rights are a barrier to U.S. exports, but only to countries that pose a strong threat-of-imitation (e.g. China). The stronger patent rights required under the WTO agreement increase U.S. exports to these high-threat markets. Alternatively, strengthening patent rights in countries that pose a weak threat-of-imitation reinforces monopoly power and reduces U.S. exports to these markets.