Spillovers in Space: Does Geography Matter?

41 Pages Posted: 7 Jun 2016

See all articles by Sergey Lychagin

Sergey Lychagin

Central European University (CEU)

Joris Pinkse

Pennsylvania State University, College of the Liberal Arts - Department of Economic

Margaret E. Slade

University of British Columbia (UBC)

John Van Reenen

London School of Economics - Centre for Economic Performance (CEP); Stanford Graduate School of Business; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: June 2016

Abstract

Using U.S. 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, as are technology (but not product) spillovers, 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 and Pinkse, Joris and Slade, Margaret E. and Van Reenen, John Michael, Spillovers in Space: Does Geography Matter? (June 2016). The Journal of Industrial Economics, Vol. 64, Issue 2, pp. 295-335, 2016. Available at SSRN: https://ssrn.com/abstract=2791218 or http://dx.doi.org/10.1111/joie.12103

Sergey Lychagin (Contact Author)

Central European University (CEU) ( email )

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HOME PAGE: http://www.personal.ceu.hu/staff/Sergey_Lychagin/

Joris Pinkse

Pennsylvania State University, College of the Liberal Arts - Department of Economic ( email )

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Margaret E. Slade

University of British Columbia (UBC) ( email )

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John Michael Van Reenen

London School of Economics - Centre for Economic Performance (CEP) ( email )

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Stanford Graduate School of Business ( email )

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Centre for Economic Policy Research (CEPR)

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United Kingdom

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