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Is Geographic Nearness Important for Trading Ideas? Evidence from the US

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  • Drivas, Kyriakos
  • Economidou, Claire

Abstract

This paper studies the relative geographic scope of two different channels of knowledge flows, a market channel where knowledge diffuses via patent transactions and a non-market channel where knowledge spillovers operate via patent citations. While there is significant work on informal non-market channels of knowledge diffusion, formal market channels of knowledge transfer are less studied, primarily due to the lack of comprehensive data. Using a newly compiled dataset by the Office of the Chief Economist at the United States Patent and Trademark Office of transactions of US issued patents, we are able to provide novel insights on the spread of patent transaction flows across the states of the US. Our findings support that geographic proximity, in terms of distance and border, matters for the spread of knowledge for both channels; however, it is more essential to the operation of market based (patent trades) than to the operation of non-market based (citations) flows. Although both flows are highly localized, the geographic scope of knowledge flows based on citations is larger than that of traded patents. Intra-sectoral flows are also found to be very localized with Mechanical sector to exhibit the most geographically confined knowledge flows, while flows from information technology sectors, i.e., Electronics and Computers, are the most far reached compared to the knowledge flows from the rest of the sectors, both in the US and abroad. Finally, there is no nuance evidence that the importance of distance has declined over time, either at state or national level for both types of flows.

Suggested Citation

  • Drivas, Kyriakos & Economidou, Claire, 2014. "Is Geographic Nearness Important for Trading Ideas? Evidence from the US," MPRA Paper 58105, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:58105
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    Cited by:

    1. Orazbayev, Sultan, 2017. "International knowledge flows and the administrative barriers to mobility," Research Policy, Elsevier, vol. 46(9), pages 1655-1665.
    2. Archontakis, Fragiskos & Varsakelis, Nikos C., 2017. "Patenting abroad: Evidence from OECD countries," Technological Forecasting and Social Change, Elsevier, vol. 116(C), pages 62-69.
    3. Rosa Caiazza & Aileen Richardson & David Audretsch, 2015. "Knowledge effects on competitiveness: from firms to regional advantage," The Journal of Technology Transfer, Springer, vol. 40(6), pages 899-909, December.
    4. repec:eee:enepol:v:113:y:2018:i:c:p:430-438 is not listed on IDEAS
    5. repec:eee:respol:v:46:y:2017:i:9:p:1644-1654 is not listed on IDEAS
    6. Chiara Criscuolo & Angelo Secchi, 2016. "Resources (mis)allocation, innovation and the competitiveness of Europe," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 43(1), pages 1-9, March.
    7. Drivas, Kyriakos & Fafaliou, Irene & Fampiou, Elpiniki & Yannelis, Demetrius, 2014. "The Effect of Patent Grant on the Geographic Reach of Patent Sales," MPRA Paper 60099, University Library of Munich, Germany.

    More about this item

    Keywords

    patent transactions; citations; knowledge flows; localization; distance;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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