What Do We Know About Geographical Knowledge Spillovers and Regional Growth? A Survey of the Literature

Abstract

Modern (endogenous) growth theory tells us that knowledge is crucial for the sustained growth of high-income economies. Against this background, the paper provides a survey of theoretical and empirical findings highlighting the question of how geographically limited knowledge diffusion can help to explain clusters of regions with persistently different levels of growth. The paper discusses this topic in two steps: First, the theoretical concept of knowledge spillovers is outlined by discussing the different types of knowledge, the spatial dimension of knowledge spillovers, and the geographical mechanisms and structural conditions of knowledge diffusion. Secondly, the paper analyzes the empirical evidence concerning the theoretical propositions.

Keywords: Knowledge spillovers, regional growth, research and development, innovation, diffusion of innovations

JEL Classification: R11, R12, R58