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Spillovers in Space: Does Geography Matter?

  • Sergey Lychagin
  • Joris Pinkse
  • Margaret E. Slade
  • John Van Reenen

Using US firm level panel data we simultaneously assess the contributions to productivity of three potential sources of research and development spillovers: geographic, technological, and product market ("horizontal"). To do so, we construct new measures of geographic proximity based on the distribution of a firm's inventor locations as well as its headquarters. We find that geographic location is important for productivity, perhaps dominating other spillover mechanisms, and that both intra- and inter-regional (counties) spillovers matter. The geographic location of a firm's researchers is more important than its headquarters. These benefits may be the reason why local policy-makers compete so hard for the location of local R&D labs and high tech workers.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0991.

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Date of creation: Aug 2010
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Handle: RePEc:cep:cepdps:dp0991
Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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  1. Greenstone, Michael & Hornbeck, Richard A. & Moretti, Enrico, 2010. "Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings," Scholarly Articles 11185831, Harvard University Department of Economics.
  2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  3. Bernstein, Jeffrey I. & Nadiri, M. Ishaq, 1988. "Research and Development and Intraindustry Spillovers: An Empirical Application of Dynamic Duality," Working Papers 88-06, C.V. Starr Center for Applied Economics, New York University.
  4. Sharon Belenzon & Mark Schankerman, 2010. "Spreading the Word: Geography, Policy and University Knowledge Diffusion," STICERD - Economics of Industry Papers 50, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  5. Griffith, Rachel & Harrison, Rupert & Van Reenen, John, 2004. "How Special is the Special Relationship? Using the Impact of US R&D Spillovers on UK Firms as a Test of Technology Sourcing," CEPR Discussion Papers 4698, C.E.P.R. Discussion Papers.
  6. Nick Bloom & Mark Schankerman & John Van Reenen, 2007. "Identifying technology spillovers and product market rivalry," LSE Research Online Documents on Economics 5091, London School of Economics and Political Science, LSE Library.
  7. Carmine Ornaghi, 2002. "Spillovers In Product And Process Innovation: Evidence From Manufacturing Firms," Economics Working Papers we023213, Universidad Carlos III, Departamento de Economía.
  8. 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.
  9. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
  10. 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.
  11. Joris Pinkse & Margaret E. Slade & Craig Brett, 2002. "Spatial Price Competition: A Semiparametric Approach," Econometrica, Econometric Society, vol. 70(3), pages 1111-1153, May.
  12. Daniel J. Wilson, 2009. "Beggar Thy Neighbor? The In-State, Out-of-State, and Aggregate Effects of R&D Tax Credits," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 431-436, May.
  13. Bronwyn H. Hall & Adam Jaffe & Manuel Trajtenberg, 2005. "Market Value and Patent Citations," RAND Journal of Economics, The RAND Corporation, vol. 36(1), pages 16-38, Spring.
  14. Jeffrey I. Bernstein, 1988. "Costs of Production, Intra- and Interindustry R&D Spillovers: Canadian Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 21(2), pages 324-47, May.
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