Borders and Distance in Knowledge Spillovers: Dying over Time or Dying with Age? - Evidence from Patent Citations

Abstract

This paper explores the effects of distance as well as subnational and national borders on international and intranational knowledge spillovers through patent citations across the 39 most patent-cited countries and 319 metropolitan statistical areas (MSAs) within the U.S. In contrast to previous findings that knowledge localization fades over time, border and distance effects increase over time for the same-age citations. This increasing effect of borders and distance is associated with strengthened knowledge agglomeration over time. Nevertheless, both border and distance effects decrease with the age of patents. Aggregate border effects are often overestimated due to various aggregation bias. Moreover, business travels and knowledge quality effectively attenuate the effect of subnational borders in knowledge flows.

Keywords: Border Effect, Distance, Gravity, Knowledge Spillovers, Patent Citations, Business Travels, Knowledge Quality, Subnational Borders, MSA

JEL Classification: F1, F2, O3, R1, R4