Knowledge, Innovation and Space

Knowledge, Innovation and Space

New Horizons in Regional Science series

Edited by Charlie Karlsson, Börje Johansson, Kiyoshi Kobayashi and Roger R. Stough

The contributions in this volume extend our understanding about the different ways distance impacts the knowledge conversion process. Knowledge itself is a raw input into the innovation process which can then transform it into an economically useful output such as prototypes, patents, licences and new companies. New knowledge is often tacit and thus tends to be highly localized, as indeed is the conversion process. Consequently, as the book demonstrates, space or distance matter significantly in the transformation of raw knowledge into beneficial knowledge.

Chapter 12: University colleges’ effect on economic growth in Swedish middlesized municipalities

Tobias Arvemo and Urban Gråsjö

Subjects: economics and finance, economics of innovation, regional economics, innovation and technology, economics of innovation, urban and regional studies, regional economics


The importance of knowledge and knowledge spillovers is well established and their existence is fundamental to the theory of endogenous growth (Romer, 1986; 1990; Aghion and Howitt, 1998). However, empirical studies show that different knowledge sources and activities have varying effects on innovation output and corresponding economic growth. When the number of patents (granted as well as applications) is used as an output, the empirical evidence points towards company (private) R & D as the most important knowledge source. University R & D is also of some importance, but its importance varies considerably across countries. Empirical studies performed on US data and European data agree on the importance of company R & D, but differ when it comes to the effect from universities. In a general comparison, studies using US data (Jaffe, 1989; Feldman, 1994; Anselin et al., 1997) demonstrate larger effects of university R & D on patent production than comparable studies using data from different countries in Europe. For instance, the empirical findings in Gråsjö (2006) reveal that university R & D has no impact on the production of patents for Swedish municipalities. The same result can also be found for France (Ronde and Hussler, 2005). Furthermore, in a study conducted with data from West Gemany, Fritsch and Slavtchev (2005) show that the effect of university R & D is much smaller (although statistically significant) than the corresponding effect in the US studies. It could also be the case that university R & D affects the investigated outputs indirectly through its feasible impact on R & D conducted by companies.

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