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Spillovers in space: does geography matter?

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  • Lychagin, Sergey
  • Slade, Margaret E.
  • Pinkse, Joris
  • Van Reenen, John

Abstract

Using US firm level panel data we simultaneously assess the contributions to productivity of three potential sources of research and development spillovers: geographic, technological, and product market (“horizontal”). To do so, we construct new measures of geographic proximity based on the distribution of a firm’s inventor locations as well as its headquarters. We find that geographic location is important for productivity, perhaps dominating other spillover mechanisms, and that both intra– and inter–regional (counties) spillovers matter. The geographic location of a firm’s researchers is more important than its headquarters. These benefits may be the reason why local policy–makers compete so hard for the location of local R&D labs and high tech workers.

Suggested Citation

  • Lychagin, Sergey & Slade, Margaret E. & Pinkse, Joris & Van Reenen, John, 2016. "Spillovers in space: does geography matter?," LSE Research Online Documents on Economics 67029, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:67029
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    More about this item

    Keywords

    R&D spillovers; geographic proximity; technological proximity; horizontal proximity; spatial econometrics;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • 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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