We examine the "home bias" of international knowledge spillovers as measured by the speedof patent citations (i.e. knowledge spreads slowly over international boundaries). We presentthe first compelling econometric evidence that the geographical localization of knowledgespillovers has fallen over time, as we would expect from the dramatic fall in communicationand travel costs. Our proposed estimator controls for correlated fixed effects and censoring induration models and we apply it to data on over two million citations between 1975 and1999. Home bias declines substantially when we control for fixed effects: there is practicallyno home bias for the more "modern" sectors such as pharmaceuticals andinformation/communication technologies.
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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number
dp0818.
Find related papers by JEL classification: O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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