Do Patents Weaken the Localization of Innovations? Evidence from World's Fairs, 1851-19150

Abstract:     
This paper examines whether patents weaken the tendency of innovations to localize geographically as they encourage inventors to publicize their ideas. The empirical analysis introduces a newly-collected data set of more than 5,000 British and American innovations at four world’s fairs between 1851 and 1915. The data show that innovations tend to be less localized in industries where patenting rates are high, even controlling for the geographic concentration of production. Evidence from the 19th-century chemical industry suggests that innovations tend to become less localized in response to exogenous increases in patenting.

Keywords: Innovation, Patents, Knowledge Spillovers, Localization, Economic History

JEL Classifications: O30, O31, O34, N00, N13, R12

Working Paper Series