Location, location, location: The geography of innovation and knowledge spillovers
The purpose of this paper is to integrate what has recently been learned about the location of innovative activity. There is considerable evidence that R&D spillovers exist, and that they are geographically bounded. The extent to which such knowledge externalities exist as well as the cost of transmitting such spillovers across geographic space is not the same across industries and clearly contributes for the propensity for innovative activity to cluster more in some industries than in others.
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