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Measuring Spillovers from Industrial R&D: On the Importance of Geographic and Technological Proximity

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  • Michael J. Orlando

    (Federal Reserve Bank of Kansas City)

Abstract

I present evidence to suggest that an important share of the apparent geographic localization of spillovers from industrial R&D may be an artifact of other agglomerative forces. A production-function framework is used to examine the role of geographic and technological proximity for interfirm spillovers from R&D in SIC 35. Spillovers among firms within narrow, four-digit industrial classifications are generally stronger than those identified within the broader, three-digit class. Such spillovers, however, do not appear to be attenuated by distance. Geographic distance does appear to attenuate spillovers that cross four-digit boundaries, suggesting that they may play a role in the formation of diverse (but not too diverse) industrial agglomerations.

Suggested Citation

  • Michael J. Orlando, 2004. "Measuring Spillovers from Industrial R&D: On the Importance of Geographic and Technological Proximity," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 777-786, Winter.
    • Handle: RePEc:rje:randje:v:35:y:2004:4:p:777-786
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    More about this item

    Keywords

    Management of Technological Innovation and R&D Technological Change: Choices and Consequences; Diffusion Processes (includes impact on production; welfare; income distribution; international competitiveness; military power; measurement; and case studies; international transfer of technology) Other Production and Pricing Analysis (spatial analysis firm location decision; industrial districts) R&D;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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