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Localized knowledge spillovers and patent citations: A distance-based approach

  • Yasusada Murata

    (Advanced Research Institute for the Sciences and Humanities, Nihon University)

  • Ryo Nakajima

    (Department of Economics, Yokohama National University)

  • Ryosuke Okamoto

    (National Graduate Institute for Policy Studies)

  • Ryuichi Tamura

    (Graduate School of Humanities and Social Sciences, University of Tsukuba)

The existence of localized knowledge spillovers found by Jaffe, Trajtenberg and Henderson (1993) has recently been challenged by Thompson and Fox-Kean (2005). To settle this debate, we develop a new approach by incorporating their concepts of control patents into the distance-based test of localization (Duranton and Overman, 2005). Using microgeographic data, we identify localization distance for each technology class while allowing for cross-boundary spillovers, unlike the existing literature where localization is detected at the state or metropolitan statistical area level. We find solid evidence supporting localized knowledge spillovers even when finer controls are used. We further relax the commonly made assumption of perfect controls, and show that the majority of technology classes exhibit localization unless hidden biases induced by imperfect controls are extremely large.

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Paper provided by National Graduate Institute for Policy Studies in its series GRIPS Discussion Papers with number 11-11.

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Length: 42 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:ngi:dpaper:11-11
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  1. Ajay Agrawal & Iain Cockburn & Carlos Rosell, 2010. "Not Invented Here? Innovation in Company Towns," NBER Chapters, in: Cities and Entrepreneurship National Bureau of Economic Research, Inc.
  2. Pierre-Philippe Combes & Gilles Duranton, 2001. "Labor pooling, labor poaching and spatial clustering," LSE Research Online Documents on Economics 20103, London School of Economics and Political Science, LSE Library.
  3. Peter Thompson & Melanie Fox Kean, 2004. "Patent Citations and the Geography of Knowledge Spillovers: A Reassessment," Working Papers 0401, Florida International University, Department of Economics.
  4. Klaus Desmet & Esteban Rossi-Hansberg, 2010. "Spatial Development," Working Papers 2010.26, Fondazione Eni Enrico Mattei.
  5. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 151-184, February.
  6. Ryo Nakajima & Ryuichi Tamura & Nobuyuki Hanaki, 2009. "The Effect of Collaboration Network on Inventors' Job Match, Productivity and Tenure," Tsukuba Economics Working Papers 2009-001, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
  7. 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.
  8. Peter Thompson, 2006. "Patent Citations and the Geography of Knowledge Spillovers: Evidence from Inventor- and Examiner-added Citations," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 383-388, May.
  9. Duranton, Gilles & Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2010. "The Economics of Clusters: Lessons from the French Experience," OUP Catalogue, Oxford University Press, number 9780199592203.
  10. Agrawal, Ajay & Kapur, Devesh & McHale, John, 2008. "How do spatial and social proximity influence knowledge flows? Evidence from patent data," Journal of Urban Economics, Elsevier, vol. 64(2), pages 258-269, September.
  11. William R. Kerr & Scott Duke Kominers, 2010. "Agglomerative Forces and Cluster Shapes," Harvard Business School Working Papers 11-061, Harvard Business School, revised Nov 2012.
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