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Localized knowledge spillovers and patent citations: A distance-based approach (revised version)

  • Yasusada Murata

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

  • Ryo Nakajima

    (Department of Economics, Keio University)

  • Ryosuke Okamoto

    (National Graduate Institute for Policy Studies)

  • Ryuichi Tamura

    (Center for Economic Growth Strategy, Yokohama National University)

We develop a new distance-based test of localized knowledge spillovers that embeds the concept of control patents. Using microgeographic data, we identify localization distance for each technology class while allowing for spillovers across geographic units. We revisit the debate by Thompson and Fox-Kean (2005a,b) and Henderson, Jaffe and Trajtenberg (2005) on the existence of localized knowledge spillovers, and find solid evidence supporting localization even when using fine-grained controls. We further relax the assumption of perfect controls, and show that our distance-based test detects localization for the majority of technology classes 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 12-18.

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Length: 38 pages
Date of creation: Jan 2013
Date of revision:
Handle: RePEc:ngi:dpaper:12-18
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  1. Gilles Duranton & Henry Overman, 2006. "Exploring the Detailed Location Patterns of UK Manufacturing Industries Using Microgeographic Data," CEP Discussion Papers dp0756, Centre for Economic Performance, LSE.
  2. Yasusada Murata & Ryo Nakajima & Ryosuke Okamoto & Ryuichi Tamura, 2011. "Localized knowledge spillovers and patent citations: A distance-based approach," Tsukuba Economics Working Papers 2010-010, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
  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. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
  5. 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.
  6. 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.
  7. Ichino, Andrea & Mealli, Fabrizia & Nannicini, Tommaso, 2006. "From Temporary Help Jobs to Permanent Employment: What Can We Learn from Matching Estimators and their Sensitivity?," IZA Discussion Papers 2149, Institute for the Study of Labor (IZA).
  8. 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.
  9. Combes, Pierre-Philippe & Duranton, Gilles, 2001. "Labour Pooling, Labour Poaching and Spatial Clustering," CEPR Discussion Papers 2975, C.E.P.R. Discussion Papers.
  10. 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.
  11. Agrawal, Ajay & Cockburn, Iain & Rosell, Carlos, 2010. "Not Invented Here? Innovation in company towns," Journal of Urban Economics, Elsevier, vol. 67(1), pages 78-89, January.
  12. 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.
  13. 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.
  14. Guildo W. Imbens, 2003. "Sensitivity to Exogeneity Assumptions in Program Evaluation," American Economic Review, American Economic Association, vol. 93(2), pages 126-132, May.
  15. Peter Thompson & Melanie Fox-Kean, 2005. "Patent Citations and the Geography of Knowledge Spillovers: A Reassessment: Reply," American Economic Review, American Economic Association, vol. 95(1), pages 465-466, March.
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