Similarity Of R&D Activities, Physical Proximity, and The Extent Of R&D Spillovers
AbstractThe diffusion of knowledge generates positive externalities if knowledge flows increase the productivity of Research and Development (R&D) by the recipients of these flows. This paper investigates the extent to which this positive spillover effect of knowledge diffusion depends on the similarity of research activities by the originator and recipient of the knowledge. The paper also investigates at what rate these spillover effects diminish as the distance between the originator and recipient increases. We find, using regional patent and R&D expenditure data from the European Union, that similarity between R&D activities is not only statistically significant, but salient: regions with completely dissimilar R&D activities exhibit essentially no spillovers at all. We also find an increase in the distance between the originating and recipient region by 550 kilometres reduces spillovers by 75% (as low as 55% in some specifications). Unlike much of the extant literature, the rate of spatial decay of spillovers is estimated jointly with the remaining parameters of the model rather than through specification searches over a set of alternative weight matrices. Our results are robust to the inclusion of unobserved country effects and border barriers.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 45962.
Date of creation: 01 Apr 2007
Date of revision:
Technological similarities; diffusion; spatial effects;
Find related papers by JEL classification:
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
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