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Product life‐cycle, knowledge capital, and comparative advantage
Author(s) -
Chen Xiaoping,
Shao Yuchen
Publication year - 2020
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/roie.12449
Subject(s) - imitation , economics , product lifecycle , endowment , product (mathematics) , intellectual property , capital (architecture) , comparative advantage , international trade , new product development , industrial organization , computer science , psychology , social psychology , philosophy , geometry , mathematics , management , archaeology , epistemology , history , operating system
This paper empirically investigates the effect of product life‐cycle on trade patterns. We measure the product life‐cycle length with patent citation data at the industry level. Using bilateral trade data from 2002 to 2006, we find that countries with more knowledge capital endowment export more in industries with shorter product life‐cycles. We show that this pattern is largely driven by the risk of imitation. The pattern is reversed when imitation is limited by stronger intellectual property rights.