This paper investigates, empirically, the determinants of international technology diffusion using data on technology licensing fees for 61 countries during 1995-2012. A multi-country model of innovation and diffusion yields a gravity equation for bilateral royalty payments as a function of economic fundamentals. The gravity equation is estimated using nonlinear methods. I then investigate discrepancies between model's predictions and observed royalty payments to identify the role of fundamentals vs. other factors such as imperfect IPR protection, the production structure and tax regulations. An accounting decomposition shows that fundamentals account for most of the variation in royalty payments, whereas imperfect IPR protection and other factors are important in accounting for discrepancies between model and data.

Speaker:

Dr. Santacreu is a Senior Economist at the Federal Reserve Bank of Saint Louis. Before joining the St. Louis Fed in 2014, Dr. Santacreu served as an assistant professor at the INSEAD Business School. Her areas of research are international trade, macroeconomics, economic growth and international finance. Her work has been published in several academic journals including the Journal of Monetary Economics, Journal of International Economics, Journal of Financial Economics, and American Economic Journal: Macroeconomics. She received the Ph.D. in economics from New York University in 2009.