Working Paper

On the importance of geographic and technological proximity for R&D spillovers : an empirical investigation


Abstract: Empirical studies of the external effects of R&D suggest that both geographic and technological distance attenuate inter-firm spillovers from innovative activity. The results presented here indicate that the tendency for R&D spillovers to localize economic activity is conditional on the technological relation between spillover generating and receiving firms. The production function framework is generalized to control for correlation between measures of geographic and technological proximity. Coefficient estimates confirm that R&D spillovers are largest among technological neighbors. However, spillovers within narrowly defined technological groups do not appear to be attenuated by distance. Geographic proximity serves to attenuate only those inter-firm spillovers that cross narrowly defined technological boundaries.

Keywords: Geography;

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Research Working Paper

Publication Date: 2000

Number: RWP 00-02