IDEAS home Printed from https://ideas.repec.org/p/hit/iirwps/16-11.html
   My bibliography  Save this paper

Testing for localization: A new approach

Author

Listed:
  • MURATA, Yasusada
  • NAKAJIMA, Ryo
  • TAMURA, Ryuichi

Abstract

Recent empirical studies document that knowledge spillovers attenuate and industry localization decays with distance. It is thus imperative to detect localization accurately especially at short distances. We propose a new approach to testing for localization that corrects the first-order bias at and near the boundary in existing methods while retaining all desirable properties at interior points. Employing the NBER U.S. Patent Citations Data File, we illustrate the performance of our localization measure based on local linear density estimators. Our results suggest that the existing kernel density methods and regression approaches can be substantially biased at short distances.

Suggested Citation

  • MURATA, Yasusada & NAKAJIMA, Ryo & TAMURA, Ryuichi, 2016. "Testing for localization: A new approach," IIR Working Paper 16-11, Institute of Innovation Research, Hitotsubashi University.
  • Handle: RePEc:hit:iirwps:16-11
    Note: August 19, 2016
    as

    Download full text from publisher

    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/28106/1/070iirWP16-11.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. William R. Kerr & Scott Duke Kominers, 2015. "Agglomerative Forces and Cluster Shapes," The Review of Economics and Statistics, MIT Press, vol. 97(4), pages 877-899, October.
    2. Yasusada Murata & Ryo Nakajima & Ryosuke Okamoto & Ryuichi Tamura, 2014. "Localized Knowledge Spillovers and Patent Citations: A Distance-Based Approach," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 967-985, December.
    3. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 377-393, May.
    4. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
    5. Gilles Duranton & Henry G. Overman, 2005. "Testing for Localization Using Micro-Geographic Data," Review of Economic Studies, Oxford University Press, vol. 72(4), pages 1077-1106.
    6. Buzard, Kristy & Carlino, Gerald A. & Hunt, Robert M. & Carr, Jake & Smith, Tony E., 2015. "Localized Knowledge Spillovers: Evidence from the Agglomeration of American R&D Labs and Patent Data," Working Papers 15-3, Federal Reserve Bank of Philadelphia.
    7. Gilles Duranton & Henry G. Overman, 2008. "Exploring The Detailed Location Patterns Of U.K. Manufacturing Industries Using Microgeographic Data," Journal of Regional Science, Wiley Blackwell, vol. 48(1), pages 213-243.
    8. Manuel Trajtenberg & Gil Shiff & Ran Melamed, 2009. "The "Names Game": Harnessing Inventors, Patent Data for Economic Research," Annals of Economics and Statistics, GENES, issue 93-94, pages 67-77.
    9. Sharon Belenzon & Mark Schankerman, 2013. "Spreading the Word: Geography, Policy, and Knowledge Spillovers," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 884-903, July.
    10. Carlino, Gerald & Kerr, William R., 2015. "Agglomeration and Innovation," Handbook of Regional and Urban Economics, Elsevier.
    11. Rebecca Henderson & Adam Jaffe & Manuel Trajtenberg, 2005. "Patent Citations and the Geography of Knowledge Spillovers: A Reassessment: Comment," American Economic Review, American Economic Association, vol. 95(1), pages 461-464, March.
    12. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    13. repec:bof:bofrdp:urn:nbn:fi:bof-201512111472 is not listed on IDEAS
    14. Glenn Ellison & Edward L. Glaeser & William R. Kerr, 2010. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," American Economic Review, American Economic Association, vol. 100(3), pages 1195-1213, June.
    15. Sharon Belenzon & Mark Schankerman, 2010. "Spreading the Word: Geography, Policy and Knowledge Spillovers," CEP Discussion Papers dp1005, Centre for Economic Performance, LSE.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Buzard, Kristy & Carlino, Gerald A. & Hunt, Robert M. & Carr, Jake & Smith, Tony E., 2017. "Localized Knowledge Spillovers: Evidence from the Spatial Clustering of R&D Labs and Patent Citations," Working Papers 17-32, Federal Reserve Bank of Philadelphia.

    More about this item

    Keywords

    localization; knowledge spillovers; local linear density; boundary bias; micro-geographic data;

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hit:iirwps:16-11. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Digital Resources Section, Hitotsubashi University Library). General contact details of provider: http://edirc.repec.org/data/iihitjp.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.