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On the importance of geographic and technological proximity for R&D spillovers : an empirical investigation


  • Michael J. Orlando


Empirical studies of the external effects of R&D suggest that both geographic and technological distance attenuate inter-firm spillovers from innovative activity. The results presented here indicate that the tendency for R&D spillovers to localize economic activity is conditional on the technological relation between spillover generating and receiving firms. The production function framework is generalized to control for correlation between measures of geographic and technological proximity. Coefficient estimates confirm that R&D spillovers are largest among technological neighbors. However, spillovers within narrowly defined technological groups do not appear to be attenuated by distance. Geographic proximity serves to attenuate only those inter-firm spillovers that cross narrowly defined technological boundaries.

Suggested Citation

  • Michael J. Orlando, 2000. "On the importance of geographic and technological proximity for R&D spillovers : an empirical investigation," Research Working Paper RWP 00-02, Federal Reserve Bank of Kansas City.
  • Handle: RePEc:fip:fedkrw:rwp00-02

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    Cited by:

    1. Mario Coccia, 2008. "Spatial mobility of knowledge transfer and absorptive capacity: analysis and measurement of the impact within the geoeconomic space," The Journal of Technology Transfer, Springer, vol. 33(1), pages 105-122, February.
    2. Alessia Lo Turco & Daniela Maggioni, 2016. "On firms’ product space evolution: the role of firm and local product relatedness," Journal of Economic Geography, Oxford University Press, vol. 16(5), pages 975-1006.
    3. Michael J. Orlando, 2002. "Measuring R & D spillovers : on the importance of geographic and technological proximity," Research Working Paper RWP 02-06, Federal Reserve Bank of Kansas City.
    4. Aiello, Francesco & Cardamone, Paola, 2012. "Regional economic divide and the role of technological spillovers in Italy. Evidence from microdata," Structural Change and Economic Dynamics, Elsevier, vol. 23(3), pages 205-220.
    5. Fredin, Sabrina, 2012. "The Dynamics and Evolution of Local Industries – The case of Linköping," Papers in Innovation Studies 2012/7, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    6. Alessia Lo Turco & Daniela Maggioni, 2017. "Local Discoveries and Technological Relatedness: the Role of Foreign Firms," Papers in Evolutionary Economic Geography (PEEG) 1710, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2017.
    7. Simonen, Jaakko & McCann, Philip, 2008. "Firm innovation: The influence of R&D cooperation and the geography of human capital inputs," Journal of Urban Economics, Elsevier, vol. 64(1), pages 146-154, July.
    8. Benny Borgman & Pontus Braunerhjelm, 2010. "Entrepreneurship and Local Growth: A Comparison of the US and Sweden," Chapters,in: Entrepreneurship and Regional Development, chapter 4 Edward Elgar Publishing.
    9. Luigi Aldieri & Michele Cincera, 2009. "Geographic and technological R&D spillovers within the triad: micro evidence from US patents," The Journal of Technology Transfer, Springer, vol. 34(2), pages 196-211, April.
    10. Cardamone, Paola, 2014. "R&D, spatial proximity and productivity at firm level: evidence from Italy," MPRA Paper 57149, University Library of Munich, Germany.
    11. Vecchi, Alessandra & Brennan, Louis, 2009. "A cultural perspective on innovation in international manufacturing," Research in International Business and Finance, Elsevier, vol. 23(2), pages 181-192, June.
    12. Chad R. Wilkerson, 2002. "How high tech is the Tenth District?," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 1-27.
    13. Paola Cardamone, 2012. "A micro-econometric analysis of the role of R&D spillovers using a nonlinear translog specification," Journal of Productivity Analysis, Springer, vol. 37(1), pages 41-58, February.
    14. Jaakko Simonen & Philip McCann, 2008. "Innovation, R&D cooperation and labor recruitment: evidence from Finland," Small Business Economics, Springer, vol. 31(2), pages 181-194, August.
    15. DAUTEL Vincent & WALTHER Olivier, 2011. "The geography of innovation in the Luxembourg metropolitan region: an intra-regional approach," LISER Working Paper Series 2011-38, LISER.
    16. Matteo Bugamelli & Luigi Cannari & Francesca Lotti & Silvia Magri, 2012. "The innovation gap of Italy�s production system: roots and possible solutions," Questioni di Economia e Finanza (Occasional Papers) 121, Bank of Italy, Economic Research and International Relations Area.
    17. Jason P. Martinek & Michael J. Orlando, 2002. "Do primary energy resources influence industry location?," Economic Review, Federal Reserve Bank of Kansas City, issue Q III, pages 27-44.

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