Feb 4, 2013 Report No：12-18
Localized knowledge spillovers and patent citations: A distance-based approach (revised version)
- Yasusada MurataAdvanced Research Institute for the Sciences and Humanities, Nihon University
- Ryo NakajimaDepartment of Economics, Keio University
- Ryosuke OkamotoGRIPS
- Ryuichi TamuraCenter for Economic Growth Strategy, Yokohama National University
We develop a new distance-based test of localized knowledge spillovers that embeds
the concept of control patents. Using microgeographic data, we identify localization
distance for each technology class while allowing for spillovers across geographic units.
We revisit the debate by Thompson and Fox-Kean (2005a,b) and Henderson, Jaffe and
Trajtenberg (2005) on the existence of localized knowledge spillovers, and find solid evidence
supporting localization even when using fine-grained controls. We further relax
the assumption of perfect controls, and show that our distance-based test detects localization
for the majority of technology classes unless hidden biases induced by imperfect
controls are extremely large.
||localized knowledge spillovers, distance-based tests, microgeographic data, K-density, patent citations, control patents, sensitivity analysis