On the Importance of Geographic and Technological Proximity for R&D Spillovers: An Empirical Investigation

FRB of Kansas City Research Working Paper No. 00-02

46 Pages Posted: 8 Jun 2001  

Michael J. Orlando

Econ One Research, Inc.; University of Colorado - Denver

Date Written: July 2000

Abstract

Empirical studies of the external effects of R&D suggest that both geographic and technological distance attenuate inter-firm spillovers from innovative activity. The results presented here indicate that the tendency for R&D spillovers to localize economic activity is conditional on the technological relation between spillover generating and receiving firms. The production function framework is generalized to control for correlation between measures of geographic and technological proximity. Coefficient estimates confirm that R&D spillovers are largest among technological neighbors. However, spillovers within narrowly defined technological groups do not appear to be attenuated by distance. Geographic proximity serves to attenuate only those inter-firm spillovers that cross narrowly defined technological boundaries.

Keywords: R&D, Spillovers, Industrial Agglomeration, Geography, Empirical Studies

JEL Classification: O3, L6

Suggested Citation

Orlando, Michael J., On the Importance of Geographic and Technological Proximity for R&D Spillovers: An Empirical Investigation (July 2000). FRB of Kansas City Research Working Paper No. 00-02. Available at SSRN: https://ssrn.com/abstract=271824 or http://dx.doi.org/10.2139/ssrn.271824

Michael J. Orlando (Contact Author)

Econ One Research, Inc. ( email )

United States

University of Colorado - Denver ( email )

1475 Lawrence St.
Suite 4001
Denver, CO 80202
United States

HOME PAGE: http://www.ucdenver.edu/academics/colleges/business/degrees/ms/gem/Pages/faculty.aspx

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