Diffusing Freshness: International Technology Transfers and Trade in Fresh Fruits and Vegetables

Abstract

To mitigate losses of fresh fruits and vegetables (FFVs), new technologies are increasingly developed across different stages of the supply chain. This study examines how international technology diffusion—specifically innovations targeting FFV loss at the production and transportation stages—affects bilateral trade. We develop a gravity framework grounded in a Melitz-Pareto model and construct a novel dataset linking patent transfers from the EPO's PATSTAT database to 72 FFV products. Empirical results show that each additional patent transferred from an innovator to a recipient country increases the recipient's exports to the innovator, primarily through growth along the extensive margin. Transportation-stage technologies, which facilitate export market entry in the technology-recipient country, exert a stronger effect on exports than production-stage innovations. Results are robust across PPML, OLS, lagged OLS, and IV estimations. Overall, the findings highlight the critical role of international technology diffusion in lowering entry barriers and promoting trade in perishable goods.