This presentation is part of: D00-2 Topics in Microeconomics

U.S. Patents Abroad: Does Gravity Matter?

Fragiskos Archontakis, PhD, Economics, University of Alicante, Fundamentos del Análisis Económico , Campus de San Vicente, Alicante, 03080, Spain and Nikos C. Varsakelis, Ph.D, Department of Economics, Aristotle University of Thessaloniki, p.o.box 184, Thessaloniki, 54124, Greece.

One of the popular models in the empirical trade literature is the gravity model. It usually relates the bilateral trade flows between countries to the distance between countries and their economic sizes measured via the gravity variable GDP. In this paper, we adopt the gravity model to explain the flow of US patents to the OECD countries.  Our analysis is based on the theoretical foundations of the gravity equation in international trade proposed by Anderson (1979) and Bergstrand (1985). Gravity variables are the total number of patents the US (source country) residents registered abroad and the total number of patents registered by foreigners in the destination country. We estimated a gravity equation using the data for patents granted to US citizens in 27 OECD countries for an eleven years period (1995-2005). We applied the pooled, fixed and random effects regressions along with Poisson and Negative Binomial regressions for random effects. The signs of the estimated coefficients are the same across methods of estimations and their size does not change significantly.