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Colocation and knowledge diffusion: evidence from million dollar plants

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  • Christian Fons-Rosen
  • Vincenzo Scrutinio
  • Katalin Szemeredi

Abstract

This paper uses the entry of large corporations into U.S. counties during the 1980s and 1990s to analyse the effect of plant opening on knowledge spillovers to local inventors. We use a difference-in-differences identification strategy exploiting information on the revealed ranking of possible locations for large plants in the US. Under the identifying assumption that locations not chosen (losers) are a counterfactual for the chosen location (winner), we find that patents of these large corporations are 68% more likely to be cited in the winning counties relative to the losing counties after entry. The effect materializes after the opening of the plant, rather than after the entry decision itself. The increase in citations is stronger for more recent patents whereas patent quality does not seem to play an important role. We find that the increase in citations is larger from patents belonging to the same technology class of the cited patent.

Suggested Citation

  • Christian Fons-Rosen & Vincenzo Scrutinio & Katalin Szemeredi, 2016. "Colocation and knowledge diffusion: evidence from million dollar plants," CEP Discussion Papers dp1447, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1447
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    Cited by:

    1. Falck, Oliver & Koenen, Johannes & Lohse, Tobias, 2019. "Evaluating a place-based innovation policy: Evidence from the innovative Regional Growth Cores Program in East Germany," Regional Science and Urban Economics, Elsevier, vol. 79(C).

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    More about this item

    Keywords

    productivity; innovation; knowledge diffusion;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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