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Is geographic nearness important for trading ideas? Evidence from the US

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  • Kyriakos Drivas
  • Claire Economidou

Abstract

This paper studies the relative geographic scope of two different channels of knowledge flows, a market channel where knowledge diffuses via patent transactions and a non-market channel where knowledge spillovers operate via patent citations. While there is significant work on informal non-market channels of knowledge diffusion, formal market channels of knowledge transfer are less studied, primarily due to the lack of comprehensive data. Using a newly compiled dataset by the Office of the Chief Economist at the United States Patent and Trademark Office of transactions of US issued patents, we are able to provide novel insights on the spread of patent transaction flows across the states of the US. Our findings support that geographic proximity, in terms of distance and border, matters for the spread of knowledge for both channels; however, it is more essential to the operation of market based (patent trades) than to the operation of non-market based (citations) flows. Although both flows are highly localized, the geographic scope of knowledge flows based on citations is larger than that of traded patents. Intra-sectoral flows are also found to be very localized with Mechanical sector to exhibit the most geographically confined knowledge flows, while flows from information technology sectors, i.e., Electronics and Computers, are the most far reached compared to the knowledge flows from the rest of the sectors, both in the US and abroad. Finally, there is no nuance evidence that the importance of distance has declined over time, either at state or national level for both types of flows. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Kyriakos Drivas & Claire Economidou, 2015. "Is geographic nearness important for trading ideas? Evidence from the US," The Journal of Technology Transfer, Springer, vol. 40(4), pages 629-662, August.
    • Handle: RePEc:kap:jtecht:v:40:y:2015:i:4:p:629-662
    DOI: 10.1007/s10961-014-9360-0
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    2. Kang, Yankun & Leng, Xuan & Liao, Yunxiang & Zheng, Shilin, 2024. "Information disclosure, spillovers, and knowledge accumulation," China Economic Review, Elsevier, vol. 84(C).
    3. Dezhong Duan & Yang Zhang & Ying Chen & Debin Du, 2019. "Regional Integration in the Inter-City Technology Transfer System of the Yangtze River Delta, China," Sustainability, MDPI, vol. 11(10), pages 1-19, May.
    4. Ma, Ding & Yu, Qian & Li, Jing & Ge, Mengni, 2021. "Innovation diffusion enabler or barrier: An investigation of international patenting based on temporal exponential random graph models," Technology in Society, Elsevier, vol. 64(C).
    5. Archontakis, Fragiskos & Varsakelis, Nikos C., 2017. "Patenting abroad: Evidence from OECD countries," Technological Forecasting and Social Change, Elsevier, vol. 116(C), pages 62-69.
    6. Rosa Caiazza & Aileen Richardson & David Audretsch, 2015. "Knowledge effects on competitiveness: from firms to regional advantage," The Journal of Technology Transfer, Springer, vol. 40(6), pages 899-909, December.
    7. Caviggioli, Federico & De Marco, Antonio & Montobbio, Fabio & Ughetto, Elisa, 2020. "The licensing and selling of inventions by US universities," Technological Forecasting and Social Change, Elsevier, vol. 159(C).
    8. Orazbayev, Sultan, 2017. "International knowledge flows and the administrative barriers to mobility," Research Policy, Elsevier, vol. 46(9), pages 1655-1665.
    9. Marco, Antonio De & Scellato, Giuseppe & Ughetto, Elisa & Caviggioli, Federico, 2017. "Global markets for technology: Evidence from patent transactions," Research Policy, Elsevier, vol. 46(9), pages 1644-1654.
    10. Drivas, Kyriakos & Fafaliou, Irene & Fampiou, Elpiniki & Yannelis, Demetrius, 2014. "The Effect of Patent Grant on the Geographic Reach of Patent Sales," MPRA Paper 60099, University Library of Munich, Germany.
    11. Chiara Criscuolo & Angelo Secchi, 2016. "Resources (mis)allocation, innovation and the competitiveness of Europe," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 43(1), pages 1-9, March.
    12. Wu, Xiaokang & Yang, Jijun, 2023. "High-speed railway and patent trade in China," Economic Modelling, Elsevier, vol. 123(C).
    13. Wan, Qunchao & Tang, Shiyi & Jiang, Zhenwu, 2023. "Does the development of digital technology contribute to the innovation performance of China's high-tech industry？," Technovation, Elsevier, vol. 124(C).
    14. Wenjing Wang & Yiwei Liu, 2021. "Community-level characteristics and member firms’ invention: evidence from university–industry innovation community in China," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(11), pages 8913-8934, November.
    15. Cao, Yihui & Sickles, Robin C. & Triebs, Thomas P. & Tumlinson, Justin, 2024. "Linguistic distance to English impedes research performance," Research Policy, Elsevier, vol. 53(4).
    16. Plank, Josef & Doblinger, Claudia, 2018. "The firm-level innovation impact of public R&D funding: Evidence from the German renewable energy sector," Energy Policy, Elsevier, vol. 113(C), pages 430-438.
    17. Carlo Giglio & Roberto Sbragia & Roberto Musmanno & Roberto Palmieri, 2021. "Cross-country learning from patents: an analysis of citations flows in innovation trajectories," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(9), pages 7917-7936, September.
    18. Wei Chen & Hui Qu & Kuo Chi, 2021. "Partner Selection in China Interorganizational Patent Cooperation Network Based on Link Prediction Approaches," Sustainability, MDPI, vol. 13(2), pages 1-16, January.

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    More about this item

    Keywords

    Patent transactions; Citations; Knowledge flows ; Localization; Distance; F10; F23; O33;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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