Borders and Distance in Knowledge Spillovers: Dying Over Time or Dying with Age? - Evidence from Patent Citations

Li, Yao Amber (2013): Borders and Distance in Knowledge Spillovers: Dying Over Time or Dying with Age? - Evidence from Patent Citations.

Abstract

This paper explores the effects of distance as well as subnational and national borders on international and intranational knowledge spillovers through patent citations across the 39 most patent-cited countries and 319 metropolitan statistical areas (MSAs) within the U.S. In contrast to previous findings that knowledge localization fades over time, border and distance effects increase over time for the same-age citations. This increasing effect of borders and distance is associated with strengthened knowledge agglomeration over time. Nevertheless, both border and distance effects decrease with the age of patents. Aggregate border effects are often overestimated due to various aggregation bias. Moreover, industrial specialization and business travels effectively attenuate the effect of subnational borders in knowledge flows.

• Item Type: MPRA Paper
• Language: English
• Keywords: Border Effect, Distance, Gravity, Knowledge Spillovers, Knowledge Agglomeration, Patent Citations, Business Travels, Industrial Specialization
• Subjects: F - International Economics > F1 - Trade; F - International Economics > F2 - International Factor Movements and International Business; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics

References

Agrawal, A., I. Cockburn, and J. McHale (2006): “Gone but not forgotten: knowledge flows, labor mobility, and enduring social relationships,” Journal of Economic Geography, 6(5), 571–591.

Agrawal, A., D. Kapur, J. McHale, and A. Oettl (2011): “Brain drain or brain bank? The impact of skilled emigration on poor-country innovation,” Journal of Urban Economics, 69(1), 43–55.

Alcaer, J., and M. Gittelman (2006): “Patent Citations as a Measure of Knowledge Flows: The Influence of Examiner Citations,” The Review of Economics and Statistics, 88(4), 774–779.

Anderson, J. E., and E. van Wincoop (2003): “Gravity with Gravitas: A Solution to the Border Puzzle,” American Economic Review, 93(1), 170–192.

Audretsch, D. B., and M. P. Feldman (2004): “Knowledge spillovers and the geography of innovation,” in Handbook of Regional and Urban Economics, ed. by J. V. Henderson, and J. F. Thisse, vol. 4 of Handbook of Regional and Urban Economics, chap. 61, pp. 2713–2739. Elsevier.

Chen, N. (2004): “Intra-national versus international trade in the European Union: why do national borders matter?,” Journal of International Economics, 63(1), 93–118.

Cristea, A. D. (2011): “Buyer-seller relationships in international trade: Evidence from U.S. States' exports and business-class travel,” Journal of International Economics, 84(2), 207 – 220.

Disdier, A.-C., and K. Head (2008): “The Puzzling Persistence of the Distance Effect on Bilateral Trade,” The Review of Economics and Statistics, 90(1), 37–48.

Ellison, G., and E. L. Glaeser (1997): “Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach,” Journal of Political Economy, 105(5), 889–927.

Feenstra, R. C. (2002): “Border Effects and the Gravity Equation: Consistent Methods for Estimation,” Scottish Journal of Political Economy, 49(5), 491–506.

Griffith, R., S. Lee, and J. V. Reenen (2011): “Is distance dying at last? Falling home bias in fixed-effects models of patent citations,” Quantitative Economics, 2(2), 211–249.

Hall, B. H., A. B. Jaffe, and M. Trajtenberg (2001): “The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools,” NBER Working Papers 8498, National Bureau of Economic Research, Inc.

Henderson, R., A. Jaffe, and M. Trajtenberg (2005): “Patent Citations and the Geography of Knowledge Spillovers: A Reassessment: Comment,” American Economic Review, 95(1), 461–464.

Hillberry, R., and D. Hummels (2008): “Trade responses to geographic frictions: A decomposition using micro-data,” European Economic Review, 52(3), 527–550.

Hovhannisyan, N., and W. Keller (2011): “International Business Travel: An Engine of Innovation?,” NBER Working Papers 17100, National Bureau of Economic Research, Inc.

Imbs, J., and R. Wacziarg (2003): “Stages of Diversification,” American Economic Review, 93(1), 63–86.

Jaffe, A. B., M. Trajtenberg, and R. Henderson (1993): “Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations,” The Quarterly Journal of Economics, 108(3), 577–98.

Maruseth, P. B., and B. Verspagen (2002): “Knowledge Spillovers in Europe: A Patent Citation Analysis,” Scandinavian Journal of Economics, 104(4), 531–545.

Mayer, T., and K. Head (2002): “Illusory Border Effects: Distance Mismeasurement Inflates Estimates of Home Bias in Trade,” Working Papers 2002-01, CEPII research center.

McCallum, J. (1995): “National Borders Matter: Canada-U.S. Regional Trade Patterns,” American Economic Review, 85(3), 615–23.

Mukherji, N., and J. Silberman (2013): “Absorptive Capacity, Knowledge Flows, and Innovation in U.S. Metropolitan Areas,” Journal of Regional Science, 53(3), 392–417.

Obstfeld, M., and K. Rogoff (2000): “The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?,” NBER Working Papers 7777, National Bureau of Economic Research, Inc.

Peri, G. (2005): “Determinants of Knowledge Flows and Their Effect on Innovation,” The Review of Economics and Statistics, 87(2), 308–322.

Poole, J. (2010): “Business travel as an input to international trade,” Working papers, University of California, Santa Cruz.

Redding, S. J. (2010): “The Empirics of New Economic Geography,” Journal of Regional Science, 50(1), 297–311.

Singh, J., and M. Marx (2013): “Geographic Constraints on Knowledge Spillovers: Political Borders vs. Spatial Proximity,” Management Science, 59(9), 2056–2078.

Thompson, P. (2006): “Patent Citations and the Geography of Knowledge Spillovers: Evidence from Inventor- and Examiner-added Citations,” The Review of Economics and Statistics, 88(2), 383–388.

Thompson, P., and M. Fox-Kean (2005a): “Patent Citations and the Geography of Knowledge Spillovers: A Reassessment,” American Economic Review, 95(1), 450–460.

Thompson, P., and M. Fox-Kean (2005b): “Patent Citations and the Geography of Knowledge Spillovers: A Reassessment: Reply,” American Economic Review, 95(1), 465–466.