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Chapter 16: The Geography of Knowledge Spillovers: The Role of Inventors’ Mobility Across Firms and in Space
Stefano Breschi, Camilla Lenzi, Francesco Lissoni and Andrea Vezzulli 1. Introduction In the past 20 years, research on the geography of innovation has revolved largely around the concept of ‘localized knowledge spillovers’ (hereafter LKSs). LKSs are ‘pure externalities’ (Griliches, 1992): they exist insofar as scientific and technological knowledge may escape its producer’s control, and yet diffuse only locally. LKSs may explain why innovation activities are often found to be spatially clustered (Feldman, 1999). For long supported only by circumstantial evidence, the LKS hypothesis was first tested by Jaffe, Trajtenberg and Henderson (1993; hereafter JTH). The three authors argued that knowledge spillovers may be measured by the ‘citations to prior art’ contained in most patent documents, and produced a statistical experiment showing that such citations come disproportionately from the same geographical area of the cited patents. The experiment requires matching each citing patent to a control one, with the same application date and technological classification, in order to compare their location in space. The JTH experiment has become a classical reference for most empirical work on the geography of innovation, both within mainstream economics and for unorthodox approaches, such as evolutionary and institutional ones. However, its interpretation as proof of the existence of LKSs relies on the twin assumptions that scientific and technological knowledge is largely tacit, so that face-to-face contacts are the necessary vehicle for its diffusion, and that geographical proximity is a necessary condition for those contacts to take place. As a result, JTH’s work treats geographical proximity as...
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