The Geography of Knowledge Spillovers between High-Technology Firms in Europe. Evidence from a Spatial Interaction Modelling Perspective

Fischer, Manfred M. and Scherngell, Thomas and Jansenberger, Eva (2005): The Geography of Knowledge Spillovers between High-Technology Firms in Europe. Evidence from a Spatial Interaction Modelling Perspective. Published in: Geographical Analysis , Vol. 38, No. 3 (2006): pp. 288-309.

Abstract

The focus in this paper is on knowledge spillovers between high-technology firms in Europe, as captured by patent citations. High-technology is defined to include the ISIC-sectors aerospace (ISIC 3845), electronics-telecommunication (ISIC 3832), computers and office equipment (ISIC 3825), and pharmaceuticals (ISIC 3522). The European coverage is given by patent applications at the European Patent Office that are assigned to high-technology firms located in the EU-25 member states (except Cyprus and Malta), the two accession countries Bulgaria and Romania, and Norway and Switzerland. By following the paper trail left by citations between these hightechnology patents we adopt a Poisson spatial interaction modelling perspective to identify and measure spatial separation effects to interregional knowledge spillovers. In doing so we control for technological proximity between the regions, as geographical distance could be just proxying for technological proximity. The study produces prima facie evidence that geography matters. First, geographical distance has a significant impact on knowledge spillovers, and this effect is substantial. Second, national border effects are important and dominate geographical distance effects. Knowledge flows within European countries more easily than across. Not only geography, but also technological proximity matters. Interregional knowledge flows are industry specific and occur most often between regions located close to each other in technological space.

• Item Type: MPRA Paper
• Language: English
• Keywords: Knowledge spillovers, patent citations, high-technology, European regions, Poisson spatial interaction model
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C21 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O52 - Europe; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R15 - Econometric and Input-Output Models ; Other Models

References

Almeida, P. (1996). "Knowledge Sourcing by Foreign Multinationals: Patent Citation 0Analysis in the U.S. Semiconductor Industry." Strategic Management Journal 17, 155-65.

Bailey, T. C. and A. C. Gatrell (1995). Interactive Spatial Data Analysis. Harlow: Addison-Wesley Longman.

Bernstein, J. and M. Nadiri (1988). "Interindustry R&D Spillovers, Rates of Returns and Production in High-Tech Industries." The American Economic Review 78, 429-34.

Bishop, Y. M. M., S. E. Fienberg and P. W. Holland (1975). Discrete Multivariate Analysis. Theory and Practice. Cambridge [MA] and London, England: MIT Press.

Bottazi, L. and G. Peri (2003). "Innovation and Spillovers in Regions: Evidence from European Patent Data." European Economic Review 47, 687-710.

Cameron, A. C. and P. K. Trivedi (1998). Regression Analysis of Count Data. Cambridge [UK] and New York [USA]: Cambridge University Press.

Carlaw, K. I. and R. G. Lipsey (2002). "Externalities, Technological Complementaries and Sustained Economic Growth." Research Policy 31, 1305-15.

Dun & Bradstreet (1998). Who Owns Whom. High Wycombe, UK: Dun & Bradtsreet Ltd.

Fischer, M. M. (2001). "Innovation, Knowledge Creation and Systems of Innovation." The Annals of Regional Science 35, 199-216.

Fischer, M. M. and M. Reismann (2002). "A Methodology for Neural Spatial Interaction Modelling." Geographical Analysis 34(3), 207-28.

Fischer, M. M. and A. Varga (2003). "Production of Knowledge and Geographically Mediated Spillovers from Universities." The Annals of Regional Science, 37(2), 303-23.

Flowerdew, R. and M. Aitkin (1982). "A Method of Fitting the Gravity Model Based on the Poisson Distribution." Journal of Regional Science 22(2), 191-202.

Griliches, Z. (1995). "The Discovery of the Residua." NBER Working Paper No. 5348, Cambridge [MA].

Griliches, Z. (1992). "The Search for R&D Spillovers." Scandinavian Journal of Economics 94, Supplement, 29-47.

Griliches, Z. (1990). "Patent Statistics as Economic Indicators: A Survey." Journal of Economic Literature 28, 1661-707.

Hatzichronoglou, T. (1997). Revision of the High-Technology Sector and Product Classification, STI Working Paper 1997/2. Paris: OECD.

Hausman, J., B. H. Hall and Z. Griliches (1984). "Econometric Models for Count Data with an Application to the Patents-R&D Relationship." Econometrica 52, 909-38.

Jaffe, A. B. (2000). "The U.S Patent System in Transition: Policy Innovation and the Innovation Process." Research Policy 29(5), 531-57.

Jaffe, A. B., M. S. Fogarty, and B. A. Banks (1998). "Evidence from Patents and Patent Citations on the Impact of NASA and Other Federal Labs on Commercial Innovation." Journal of Industrial Economics 46, 183-205.

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

Karlsson, C. and A. Manduchi (2001). "Knowledge Spillovers in a Spatial Context - A Critical Review and Assessment." In Knowledge, Complexity and Innovation

Systems, edited by M. M. Fischer and J. Fröhlich, 101-23. Heidelberg, Berlin and New York: Springer.

Krugman, P. (1991). Geography and Trade. Cambridge [MA]: MIT Press.

Maurseth, P. B. and B. Verspagen (2002). "Knowledge Spillovers in Europe: A Patent Citation Analysis." Scandinavian Journal of Economics 104, 531-45.

Michel, J. and B. Bettels (2001). "Patent Citation Analysis. A Closer Look at the Basic Input Data from Patent Search Reports." Scientometrics 51(1), 185-201.

Romer, P. M. (1990). "Endogenous Technological Change." Journal of Political Economy 98, 71-102.

Sen, A. and T.E. Smith (1995). Gravity Models of Spatial Interaction Behaviour. Heidelberg, Berlin and New York: Springer.

Thompson, P. (2003). Patent Citations and the Geography of Knowledge Spillovers: What Do Patents Examiners Know? Manuscript, Florida International University.

Trajtenberg, M. (2001). "Innovation in Israel 1968-1997: A Comparative Analysis Using Patent Data." Research Policy 30, 363-89.

Verspagen, B., T. Van Moergastel and M. Slabbers (1994): "MERIT concordance table: IPC - ISIC (rev. 2)." Maastricht: Maastricht Economic Research Institute on Innovation and Technology, University of Limburg.