Patenting and Innovation
Technology Adoption
Trade Policy
Luther, Z. R. The gravity of patent protection: Policy, frictions, and technology diffusion. Open Access Link
Abstract: In this paper, I study how lower likelihoods for foreign firms to obtain patent protection in local markets affect their R&D investment and technology transfer behavior. Presenting a multi-sector gravity model, I show that policies meant to address free trade are more effective in inducing welfare-improving gains to technology transfer and R&D investment than policies addressing unequal patent protection for foreign innovators. While standardizing patent protection allows domestic firms to patent their inventions abroad, gains from increased access to global markets may be offset by profit losses from increased competition at home. Calibrating the model to innovation and trade data between 2000-2014, I estimate that when patent protection is standardized between local and foreign firms, the average rate of technology transfer increases by 0-4 percentage points, inducing a 12-22% increase in the global rate of innovation. However, welfare gains are negligible. On the other hand, free trade increases welfare by 5.3% while inducing a 0-9 percentage point increase in the rate of technology transfer and a 60% increase in the global rate of innovation, since free trade reduces export costs and protects domestic intellectual property.
Bond, Eric W., & Luther, Z. R. (2025). International patent families: when to apply. Review of International Economics, 33: 450-465. Open Access Link.
Abstract: We model the decision of an innovating firm on where and when to make cross-border patent applications given the rules of the Paris Convention and Patent Cooperation Treaty (PCT). We show that an innovating firm will have an incentive to apply at the beginning (end) of the Paris Convention application window when returns are front-loaded (back-loaded). The preliminary review provided by a PCT application expedites the review process in subsequent national applications, leading to the selection of firms with more productive innovations into the PCT route for cross-border applications. We also show that the PCT's preliminary application may be used to provide information on the patentability of an innovation. To provide empirical evidence on these predictions, we compare the patenting behavior of semiconductor applicants with those of pharmaceutical applicants, where the former has among the shortest times from innovation to market and the latter the longest. Consistent with the predictions of the model, we find that pharmaceutical applications are 15 percentage points likelier than semiconductor applications to be filed at the Paris deadline for national applications under the Paris convention. PCT applications for pharmaceuticals are 32 percentage points likelier to be filed at the Paris deadline. We also find that as many as 30% of PCT applications may result in information about patentability that makes subsequent applications unprofitable.
Luther, Z. R., Swinton, S. M., & Van Deynze, B. (2022). Potential Supply of Midwest Cropland For Conversion to In-Field Prairie Strips. Land Economics, 98(2): 274–291. Open Access Link.
Abstract: Prairie strips planted into crop fields offer multiple environmental benefits. This study estimates the willingness of U.S. farmers to convert 5% of their largest corn-soybean field to prairie strips in exchange for payment. Using stated preference results to estimate land supply, we find that 20% of farmers are willing to adopt prairie strips at payments equivalent to average Conservation Reserve Program rental rates, corresponding to potential conversion of 90,000 acres on 1.8 million acres of cropland. Farmers are likelier to adopt in smaller fields and when they perceive that prairie strips will benefit environmental quality or agricultural productivity.
Luther, Z. R., Swinton, S. M., & Van Deynze, B. (2020). What drives voluntary adoption of farming practices that can abate nutrient pollution?. Journal of Soil and Water Conservation, 75(5): 640-650. Open Access Link.
Abstract: Agricultural nutrient runoff and leaching into groundwater can impose societal costs that may be external to farmer decisions. Farmers can reduce the environmental impact of nutrient losses by adopting conservation and precision nutrient diagnostic and application practices. We examine the determinants of adoption decisions of such practices using mail survey data from a large, stratified sample of corn (Zea mays L.) and soybean (Glycine max [L.] Merr.) farmers in the US eastern Corn Belt. Via an ordered probit that captures both adoption and intent to adopt eight different practices, we evaluate a broad range of potential factors driving adoption of conservation and precision agriculture practices. We find that farmer objectives other than income, such as preferences for environmental amenities or social status, were important adoption drivers for conservation and precision technologies, respectively. Livestock farms had a distinct adoption profile, with greater likelihood to adopt cover cropping and less to adopt precision technologies. Farmers who participated in work- ing lands programs were more likely to adopt both cover cropping and precision soil testing technologies. Policies and messaging to encourage voluntary adoption of practices to reduce agricultural nutrient loss should account for farmer objectives, farming systems, and existing policy incentives.
Bond, E. W., & Luther, Z. R. International patent families: where to apply.
Abstract: We present a model to explain the decision of innovators on where to apply for patent protection. This model generates predictions concerning the size of international patent families and a gravity equation for cross border patenting. We use data from PATSTAT to test the predictions of the model as to the effect of the expansion of the European Patent Office on application decisions and on how factors such as destination market characteristics and international patent treaties affect location decisions. Open Access Link
Luther, Z. R. (2024). National treatment or national barriers? Evidence from international patent families. Open Access Link
Abstract: I explore whether patent offices discriminate against foreign innovators (i.e., whether they do not comply with the "national treatment principle"), or if disparate outcomes are driven by external barriers to cross-border patenting. Using data on 22 million patent applications between 1990-2019, I find that after controlling for patent quality, foreign-owned inventions are 7-20 percentage points less likely to obtain patent protection than domestic ones. Foreign inventions also take 5-24% longer to be granted a patent and are cited by local patent examiners at a rate that is 8-30% lower than domestic applications. I find that accounting for frictions to cross-border patenting and protectionist motives significantly reduces the anti-foreign bias in the probability of patent grant and time to grant, although a large portion of the bias remains unexplained. Ameliorating cross-border (language and information) barriers can offset at least some of the remaining anti-foreign bias, namely sharing a language and subjecting a technology to a third-party evaluation process. Biases are stronger for patent offices in countries with low rates of innovation, implying that countries who rely on imitating foreign technologies are less incentivized to comply with national treatment. The nationalities of inventors are also important---research teams with a larger proportion of domestic inventors exhibit better patent prosecution and citation outcomes, implying further evidence of non-compliance with national treatment.
Luther, Z. R. National treatment and economic growth: a Schumpeterian perspecive.