Political Relations and Intellectual Collaboration : Evidence from the Global Innovation of US Multinational Corporations

This paper examines how bilateral political tensions between the U.S. and other countries impact the innovation of US multinational corporations. The results suggest that strained political relations hinder collaboration among international inventors, reducing innovation outputs. Teams including inventors in politically divided countries generate fewer and less impactful patents while facing a higher likelihood of dissolution. Inventors residing in countries with tense relationships with the U.S. file fewer patents and receive fewer forward citations. Poor political relations also obstruct the international migration of inventors and negatively impact domestic inventors who previously collaborated with foreign counterparts in affected countries. In summary, deteriorating political relations between countries have a detrimental effect on both overseas and domestic innovation within US multinationals, leading to declines in firm-wide inventive performance