Inciting Protocols - How International Environmental Agreements Trigger Knowledge Transfers

Abstract

This paper shows that international environmental agreements (IEAs) may have large impacts on both invention and international knowledge transfers of new technology. Using a uniquely constructed patent data set on SO2 abatement technologies filed in 15 signatory and non-signatory countries in the period 1970-1997, we study the timing of these inventions and their diffusion in detail. Our data enable us to track intended knowledge di¤usion by separating so called mother patents, or original inventions, from family patents, which represent the same invention but are patents filed in foreign countries. We find that innovating firms file both types of patent applications before the protocols are actually implemented. Moreover, the filing of patents abroad (‘families’) is particularly strong in the countries that cooperate through the international protocols, i.e., the signatory countries. Our results suggest that firms are aware of the potential private benefits of such international agreements and exploit potential advantages of larger product markets by seeking protection in countries that participate in the protocols.