Innovation, product quality, complexity, and duration of international trade

Abstract

Factors affecting products arrive and duration in international market are examined. Intellectual property rights (IPR) and innovation are suggested to influence exports of new products. Product quality and complexity are suggested to impact duration of trade relationships by theories. Trade data are collected from UN Comtrade and Feenstra et al (2002). Results indicate that IPR protection increases the number of new products exported to U.S. for poor countries. In addition, products with higher quality have longer trade duration and larger trade growth. More complex goods are more likely to survive than simple goods. Findings suggest that technology and innovation play an important role determining trade patterns.