Job Market Paper 

Pre-Grant Patents and Innovation Diffusion [Working Paper] [Slides]

Abstract: Are pre-grant patents effective forward-looking signals of global innovation diffusion? Patent grants are important legal milestones, but information diffusion about the underlying technologies occurs at the time patents are published. As the innovation literature rarely studies this distinction, I address this question using pre-grant patent flows across countries, sectors, and industries over time. This allows me to separately identify timing effects on diffusion and those that are running through either innovation or trade channels.   At country level, results show that the innovation channel creates larger and more persistent total factor productivity (TFP) gains and stock price responses. This confirms that international technology spillovers originate from the expansion of the global stock of knowledge rather than strategic changes in trade intensity between home countries and their partners. A one–standard-deviation foreign pre-grant patent shock raises manufacturing-sector TFP by about 1.5%, and the R&D capital stock rises by roughly 0.4% with a one-year delay. This reflects their forward-looking nature, which prompts resource reallocation in anticipation of future productivity gains. These gains are especially pronounced in countries which manufacturing sectors that are more R&D-intensive. At the industry level, the results show that countries with more value-added–intensive industries are better able to translate pre-grant patents citations into higher labour productivity gains.

Presented at (*: scheduled): *ESCoE Conference on Economic Measurement (2026); *IEA World Congress (2026); *32nd Conference on Computing in Economics and Finance (2026) ; 33rd Symposium of the Society for Nonlinear Dynamics and Econometrics (2026); Annual Conference of Scottich Economic Society (2026); European Regional Science Association (ERSA) British & Irish Section, 4th annual Online Early Career Colloquium (2026); CMA-Durham Workshop (2025); RSA Regional Futures Conference (2025); National Institute of Economic and Social Research Brown Bag Seminar (2025); Lancaster University Macro Reading Group (2025); PhD-Economic Virtual Seminar Job Market Paper Series (2025); Lancaster University Department of Economics Internal Seminar (2025); Macroeconomics Research Unit Seminar Series, University of Kwazulu-Natal (2025); NWSSDTP PhD Conference, University of Manchester (2025); 

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