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Using the variance structure of the conditional autoregressive spatial specification to model knowledge spillovers

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Author Info
Olivier Parent (Department of Economics, University of Cincinnati, Cincinnati, Ohio, USA)
James P. LeSage (McCoy College of Business Administration, Department of Finance and Economics, Texas State University-San Marcos, San Marcos, Texas, USA)

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Abstract

This study investigates the pattern of knowledge spillovers arising from patent activity between European regions. A Bayesian hierarchical model is developed that specifies region-specific latent effects parameters modeled using a connectivity structure between regions that can reflect geographical proximity in conjunction with technological and other types of proximity. This approach exploits the fact that interregional relationships may exhibit industry-specific technological linkages or transportation network linkages, which is in contrast to traditional studies relying exclusively on geographical proximity. We also allow for both symmetric and asymmetric knowledge spillovers between regions, and for heterogeneity across the regional sample. A series of formal Bayesian model comparisons provides support for a model based on technological proximity combined with spatial proximity, asymmetric knowledge spillovers, and heterogeneity in the disturbances. Estimates of region-specific latent effects parameters structured in this fashion are produced by the model and used to draw inferences regarding the character of knowledge spillovers across the regions. The method is illustrated using sample data on patent activity covering 323 regions in nine European countries. Copyright © 2008 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jae.981
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File URL: http://qed.econ.queensu.ca:80/jae/2008-v23.2/
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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 23 (2008)
Issue (Month): 2 ()
Pages: 235-256
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Handle: RePEc:jae:japmet:v:23:y:2008:i:2:p:235-256

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  1. Bruno Van Pottelsberghe De La Potterie & Frank Lichtenberg, 2001. "Does Foreign Direct Investment Transfer Technology Across Borders?," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 490-497, August. [Downloadable!] (restricted)
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  3. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June. [Downloadable!] (restricted)
  4. Bronwyn H. Hall & Adam B. Jaffe & Manuel Trajtenberg, 2001. "The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools," NBER Working Papers 8498, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 577-98, August. [Downloadable!] (restricted)
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  6. Anselin, Luc & Varga, Attila & Acs, Zoltan, 1997. "Local Geographic Spillovers between University Research and High Technology Innovations," Journal of Urban Economics, Elsevier, vol. 42(3), pages 422-448, November. [Downloadable!] (restricted)
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  9. Olivier Parent & James P. Lesage, 2007. "Using the Variance Structure of the Conditional Autoregressive Spatial Specification to Model Knowledge Spillovers," University of Cincinnati, Economics Working Papers Series 2007-03, University of Cincinnati, Department of Economics. [Downloadable!]
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  10. Wolfgang Keller, 2002. "Geographic Localization of International Technology Diffusion," American Economic Review, American Economic Association, vol. 92(1), pages 120-142, March. [Downloadable!]
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  11. Won Kim, Chong & Phipps, Tim T. & Anselin, Luc, 2003. "Measuring the benefits of air quality improvement: a spatial hedonic approach," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 24-39, January. [Downloadable!] (restricted)
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  13. Zvi Griliches, 1979. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 92-116, Spring. [Downloadable!] (restricted)
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  14. Maurseth, Per Botolf & Verspagen, Bart, 2002. " Knowledge Spillovers in Europe: A Patent Citations Analysis," Scandinavian Journal of Economics, Blackwell Publishing, vol. 104(4), pages 531-45, December. [Downloadable!] (restricted)
  15. David J. Spiegelhalter & Nicola G. Best & Bradley P. Carlin & Angelika van der Linde, 2002. "Bayesian measures of model complexity and fit," Journal Of The Royal Statistical Society Series B, Royal Statistical Society, vol. 64(4), pages 583-639. [Downloadable!] (restricted)
  16. A. F. Militino & M. D. Ugarte & L. García-Reinaldos, 2004. "Alternative Models for Describing Spatial Dependence among Dwelling Selling Prices," The Journal of Real Estate Finance and Economics, Springer, vol. 29(2), pages 193-209, 09. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Martellosio, Federico, 2008. "Testing for spatial autocorrelation: the regressors that make the power disappear," MPRA Paper 10542, University Library of Munich, Germany. [Downloadable!]
  2. Jesús Crespo-Cuaresma & Gernot Doppelhofer & Martin Feldkircher, 2009. "The Determinants of Economic Growth in European Regions," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  3. Richard Harris & Victoria Kravtsova, 2009. "In Search of W," SERC Discussion Papers 0017, Spatial Economics Research Centre, LSE. [Downloadable!]
  4. Jesus Crespo Cuaresma & Martin Feldkircher, 2009. "Spatial Filtering, Model Uncertainty and the Speed of Income Convergence in Europe," Working Papers 2009-17, Faculty of Economics and Statistics, University of Innsbruck. [Downloadable!]
  5. Olivier Parent & James P. Lesage, 2007. "Using the Variance Structure of the Conditional Autoregressive Spatial Specification to Model Knowledge Spillovers," University of Cincinnati, Economics Working Papers Series 2007-03, University of Cincinnati, Department of Economics. [Downloadable!]
    Other versions:
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