Patents and knowledge diffusion

One of the main rationales for existence patent system is to encourage knowledge diffusion through full disclosure technical embodied in a patented invention. Yet, economists and legal scholars cast doubts on validity theory. The empirical evidence actual benefits function remains limited. present paper aims expand our understanding how information spreads via exploits recent improvements machine translation (MT) identify effect broader access knowledge. More specifically, uses unique natural experiment. In September 2013, Google launched major upgrade its Patents service added applications from China National Intellectual Property Agency (CNIPA) searchable database. Using difference-in-differences approach, we show that Chinese patents into English resulted an increase citations received filed by US inventors compared suitable control group comprising translated only 2016. Our results suggest improved fosters diffusion.