Seminar  |  09/12/2023 | 03:00 PM  –  04:00 PM

Innovation & Entrepreneurship Seminar: Language Barriers and the Speed of Knowledge Diffusion

Sadao Nagaoka (Tokyo Keizai University, Japan)

Room 313 (internal)

We provide causal evidence on the effects of language barriers on the speed and extent of knowledge diffusion by exploiting the introduction of pre-grant publications in the US. Language barriers account for almost half the diffusion lag of Japan-originating knowledge to US-based inventors, relative to Japan-based inventors. This acceleration is significant only for firms with low appropriation advantage in translation (small R&D scale, or little involvement in the Japanese market), and is larger for the diffusion of high-quality inventions, suggesting difficulties of quality-targeted translation. Thus, pregrant publication provides a significant public good for cumulative innovation through accelerated access to translated foreign patents.