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What determines international and inter-sectoral knowledge flows? The impact of absorptive capacity, technological distance and spillovers

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    This paper studies determinants of knowledge flows as measured with patent forward citations that occur between 'input' and 'output sector-countries'. We look at the impact of absorptive capacity of a focal sector-country, knowledge spillovers and technological distance between sector-countries on further knowledge flows. For this purpose, we develop a knowledge flow matrix similar to input-output tables in trade where patent citations capture knowledge flows that go from the input sector-country to the output sector-country. We estimate a gravity model with variables that capture technological distance and knowledge that comes from either inside the input output pair or from external spillover sources. Our results indicate that knowledge accumulated in the output sector-country and - in some cases - external spillovers are key in generating further knowledge flows that go to the output sector-country. A distinction between high-tech and low-tech sector-countries shows that spillovers are more useful for the generation of knowledge flows if the input sector-country is low-tech. Low-tech sector-countries benefit from both high-tech knowledge from the output sector-country and external knowledge from the technological frontier. In contrast, knowledge flows based on high-tech sector-countries cannot benefit from low-tech sector-countries and only to a very limited extent from other high-tech sources. Technological distance between sector-countries has a negative impact on further knowledge flows so that only technologically proximate sector-countries are more likely to generate knowledge flows.

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    File URL: http://dx.doi.org/10.3929/ethz-a-010737145
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    Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 16-415.

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    Length: 41 pages
    Date of creation: Oct 2016
    Handle: RePEc:kof:wpskof:16-415
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    1. Li, Yao Amber, 2014. "Borders and distance in knowledge spillovers: Dying over time or dying with age?—Evidence from patent citations," European Economic Review, Elsevier, vol. 71(C), pages 152-172.
    2. Corey C. Phelps & Hongyan Yang & Kevin Steensma, 2010. "Learning from what others have learned from you: The effects of knowledge spillovers on originating firms," Post-Print hal-00528393, HAL.
    3. Czarnitzki, Dirk & Thorwarth, Susanne, 2012. "Productivity effects of basic research in low-tech and high-tech industries," Research Policy, Elsevier, vol. 41(9), pages 1555-1564.
    4. Lybbert, Travis J. & Zolas, Nikolas J., 2014. "Getting patents and economic data to speak to each other: An ‘Algorithmic Links with Probabilities’ approach for joint analyses of patenting and economic activity," Research Policy, Elsevier, vol. 43(3), pages 530-542.
    5. Morescalchi, Andrea & Pammolli, Fabio & Penner, Orion & Petersen, Alexander M. & Riccaboni, Massimo, 2015. "The evolution of networks of innovators within and across borders: Evidence from patent data," Research Policy, Elsevier, vol. 44(3), pages 651-668.
    6. Jungsoo Park, 2004. "International and Intersectoral R&D Spillovers in the OECD and East Asian Economies," Economic Inquiry, Western Economic Association International, vol. 42(4), pages 739-757, October.
    7. Jaffe, Adam B., 1989. "Characterizing the "technological position" of firms, with application to quantifying technological opportunity and research spillovers," Research Policy, Elsevier, vol. 18(2), pages 87-97, April.
    8. Andrea Morescalchi & Fabio Pammolli & Orion Penner & Petersen Alexander M. & Massimo Riccaboni, 2013. "Networks of innovators within and across borders. Evidence from patent data," Working Papers 4/2013, IMT Institute for Advanced Studies Lucca, revised Aug 2013.
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