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Adopting knowledge from reverse innovations? Transnational patents and signaling from an emerging economy

Abstract

Is there knowledge adoption of innovations from emerging economies? We theorize that, to help overcome information asymmetry across countries, granting patents to technology in the emerging economy of China can serve as a signal of technology potential and market opportunity to enhance technological knowledge adoption in a developed economy such as the United States. The effect may be greater in a complex technology sector with high information asymmetry than in a discrete technology sector, and in regions with less developed market intermediaries, where information asymmetry is high. Our difference-in-differences estimates using 4226 China–U.S. patent dyads and comparable U.S. patents support our hypotheses.

Résumé

Existe-t-il une utilisation des connaissances des innovations émanant des économies émergentes ? Nous pensons que, pour aider à surmonter l’asymétrie d’informations entre les pays, l’octroi de brevets technologiques dans l’économie émergente de la Chine peut servir d’indicateur du potentiel technologique et de l’opportunité de marché pour améliorer l’adoption des connaissances technologiques dans une économie développée telle que les États-Unis. L’effet peut être plus marqué dans un secteur technologique complexe avec une asymétrie d’informations élevée que dans un secteur technologique isolé, et dans les régions avec des intermédiaires de marché moins développés, où l’asymétrie d’informations est forte. Notre différence de différences d’estimations, fondée sur 4 226 dyades de brevets Chine–États-Unis et de brevets américains comparables, appuient nos hypothèses.

Resumen

¿Hay conocimiento de la adopción de innovaciones de economías emergentes? Teorizamos que para ayudar superar la asimetría de información entre países, otorgar patentes de tecnología en la economía emergente de China puede servir como una señal de potencial de tecnología y oportunidad de mercado para mejorar la adopción de conocimiento tecnológico en una economía desarrollada como los Estados Unidos. El efecto puede ser mayor en complejidad en el sector de tecnología con alta asimetría de información que en un sector de tecnología discreta, y en regiones con intermediarios de mercado menos desarrolladas, donde la asimetría de información es alta. Nuestras estimaciones de diferencias en diferencias usando 4226 diadas de patentes China-E.E.U.U. y comparable a patentes de E.E.U.U. apoya nuestras hipótesis.

Resumo

Existe adoção de conhecimento de inovações de economias emergentes? Teorizamos que, para ajudar a superar a assimetria de informações entre países, a concessão de patentes para tecnologia na economia emergente da China pode servir como um sinal do potencial tecnológico e da oportunidade de mercado para melhorar a adoção de conhecimento tecnológico em uma economia desenvolvida como a dos Estados Unidos. O efeito pode ser maior no setor de tecnologia complexa, com alta assimetria de informação do que no setor de tecnologia discreta e em regiões com intermediários de mercado menos desenvolvidos, onde a assimetria de informação é alta. Nossas estimativas de diferenças-em-diferenças usando 4.226 díades de patentes China-EUA e patentes comparáveis dos EUA apoiam nossas hipóteses.

摘要

发达经济体是否有采用来自新兴经济体的创新技术知识? 我们推论, 为了帮助克服各国之间的信息不对称,在新兴经济体中国授予技术专利可以作为技术潜力和市场机会的信号, 从而提高像美国这样的发达经济体的技术知识采用率。在高信息不对称性的复杂技术行业里的影响可能大于低信息不对称性离散技术行业, 以及在市场中介较不发达且信息不对称程度较高的区域里的影响可能大于市场中介较发达的区域。我们的使用4226个中国–美国专利对偶以及可比的美国专利的双重差分估算支持我们的假设。

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Acknowledgements

We are grateful to Editor Gabriel Benito and anonymous reviewers for their insightful feedback during the review process. Earlier versions of this paper benefited from the helpful comments of Xuesong Geng, Ivan Png, Jasjit Singh, Heli Wang and the participants at the Academy of Management annual meeting, Academy of International Business annual meeting, CEIBS strategy and entrepreneurship academic symposium, DRUID conference, INSEAD entrepreneurship research workshop, NUS RISE seminar, SHUFE research forum, SMU research seminar, U.C. Berkeley-Peking university patent conference, and research seminars at Fordham University, Nankai University, Peking University, Renmin University, Shandong University, Tsinghua University, University of Sydney, University of Western Australia, and Xiamen University. We thank Wenxin Guo for her excellent research assistance. We gratefully acknowledge funding support from the Ministry of Education AcRF Tier 1 Grant R-266-000-118-133, and from the Research Grants Council of Hong Kong (HKUST #16505817). The usual disclaimers apply.

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Huang, K.G., Li, J. Adopting knowledge from reverse innovations? Transnational patents and signaling from an emerging economy. J Int Bus Stud 50, 1078–1102 (2019). https://doi.org/10.1057/s41267-019-00241-9

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Keywords

  • reverse innovation
  • knowledge adoption
  • patent signaling
  • information asymmetry
  • emerging market