We examine the "home bias" of knowledge spillovers (the idea that knowledge spreads more slowly over international boundaries than within them) as measured by the speed of patent citations. We present 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 patent citations between 1975 and 1999. Home bias is exaggerated in models that do not control for fixed effects. The fall in home bias over time is weaker for the pharmaceuticals and information/communication technology sectors where agglomeration externalities may remain strong.
Authors
CPP Co-Director, IFS Research Director
Rachel is Research Director and Professor at the University of Manchester. She was made a Dame for services to economic policy and education in 2021.
Research Fellow Columbia University
Sokbae is an IFS Research Fellow and a Professor at Columbia University, with an interest in Econometrics, Applied Microeconomics and Statistics.
John Van Reenen
Journal article details
- Publisher
- Econometric Society
- Issue
- July 2011
Suggested citation
R, Griffith and S, Lee and J, Van Reenen. (2011). 'Is distance dying at last? Falling home bias in fixed effects models of patent citations' (2011)
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