Do migrant and business networks promote international royalty receipts? Evidence from the U.S.

ABSTRACT

This study examines how migration and business networks affect the trade in intellectual property using bilateral data on the U.S. and OECD member countries. The analyses are distinct in that they comprehensively examine network effects by combining previous works on tangible trade–migration relationships together with the literature on trade–FDI relationships. We show that intellectual property exports are positively related to the number of immigrants residing in the U.S. and the U.S. direct investment stocks in trading partners. However, they do not have any relationships with U.S. emigrants and FDI inflows to the U.S. The result suggests that network effects vary depending on the direction of cross-border factor movements.

KEYWORDS:

• Emigration
• foreign direct investment
• Immigration
• intellectual property
• licence fees
• service trade

JEL CLASSIFICATION:

• F14
• F21
• F22

Acknowledgements

We appreciate Jin Ke and Jingkai Hong for their research assistance and acknowledge financial support from Grants-in-Aid for Scientific Research (Grant number 16K03650) and Aoyama Gakuin University. The funding source had no involvement in the study design, analysis and data interpretation, the writing of the report, and the decision to submit the article for publication.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ Combes, Lafourcade, and Mayer (2005) use the number of routes (i.e. similar to an airline map) that connect two regions through ‘plant networks’ for business networks. Their approach cannot distinguish volume effects; although, in reality, one connection route has a stronger tie than others, both count as one. Additionally, their approach assumes symmetric business network effects between two regions, regardless of direction.

Additional information

Funding

We appreciate Jin Ke and Jingkai Hong for their research assistance and acknowledge financial support from Grants-in-Aid for Scientific Research (Grant number 16K03650) and Aoyama Gakuin University. The funding source had no involvement in the study design, analysis and data interpretation, the writing of the report, and the decision to submit the article for publication.