Rapidly innovating firms: patent lifecycle and support for trade and IP enforcement

Abstract

The rate of technological innovation and the speed with which old technologies are discarded are fundamental features of industries in the modern economy. How do these factors shape the politics of trade and trade agreements? We describe two potential channels. In one, rapid innovators support trade agreements and trade liberalization because of their privileged competitive position at the cutting edge of innovation. In the other, rapid innovators support trade agreements and intellectual property (IP) enforcement due to their particular need for speed in patent approval and enforcement. By matching data on patent lifecycles to data on United States (US) tariffs and corporate support for trade agreements and IP enforcement, we test these two theoretical accounts. We find evidence consistent with both. We conclude that rapidly innovating firms are strong supporters of globalization, though their political successes have also contributed to contention over the contemporary international order, both at home and abroad.