48 Pages Posted: 24 Aug 2007
Date Written: August 2007
We examine the home bias of international knowledge spillovers as measured by the speed of patent citations (i.e. knowledge spreads slowly over international boundaries). We present the first compelling econometric evidence that the geographical localization of knowledge spillovers has fallen over time, as we would expect from the dramatic fall in communication and travel costs. Our proposed estimator controls for correlated fixed effects and censoring in duration models and we apply it to data on over two million citations between 1975 and 1999. Home bias declines substantially when we control for fixed effects: there is practically no home bias for the more modern sectors such as pharmaceuticals and information/communication technologies.
Suggested Citation: Suggested Citation
Griffith, Rachel and Lee, Sokbae and Van Reenen, John, Is Distance Dying at Last? Falling Home Bias in Fixed Effects Models of Patent Citations (August 2007). NBER Working Paper No. w13338. Available at SSRN: https://ssrn.com/abstract=1008830
By Carlo Menon