GRIPS 政策研究センター Policy Research Center


Sep 28, 2011 Report No:11-11

Localized knowledge spillovers and patent citations:A distance-based approach

  • Yasusada MurataAdvanced Research Institute for the Sciences and Humanities, Nihon University
  • Ryo NakajimaDepartment of Economics, Yokohama National University
  • Ryosuke OkamotoGRIPS
  • Ryuichi TamuraGraduate School of Humanities and Social Sciences, University of Tsukuba
Field Economics
Language English

The existence of localized knowledge spillovers found by Jaffe, Trajtenberg and Henderson
(1993) has recently been challenged by Thompson and Fox-Kean (2005). To
settle this debate, we develop a new approach by incorporating their concepts of control
patents into the distance-based test of localization (Duranton and Overman, 2005).
Using microgeographic data, we identify localization distance for each technology class
while allowing for cross-boundary spillovers, unlike the existing literature where localization
is detected at the state or metropolitan statistical area level. We find solid evidence
supporting localized knowledge spillovers even when finer controls are used. We further
relax the commonly made assumption of perfect controls, and show that the majority of
technology classes exhibit localization unless hidden biases induced by imperfect controls
are extremely large.

Keywords localized knowledge spillovers; distance-based tests; microgeographic data;K-density; patent citations; control patents
attachment 11-11.pdf