Product life‐cycle, knowledge capital, and comparative advantage. Issue 1 (13th October 2019)

• Record Type: Journal Article
• Authors: Chen, Xiaoping; Shao, Yuchen
• Is Part Of: Review of international economics. Volume 28:Issue 1(2020)
• Page Start: 252
• Page End: 278
• Publication Date: 2019-10-13
• Subjects: International economic relations -- Periodicals; International finance -- Periodicals; Economic policy -- Periodicals; 330
• DOI: 10.1111/roie.12449
• Languages: English
• ISSNs: 0965-7576

Abstract

Abstract: 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.