Colocation and knowledge diffusion: evidence from million dollar plants

Christian Fons-Rosen, Vincenzo Scrutinio and Katalin Szemeredi

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper uses the entry of large corporations into U.S. counties during the 1980s and 1990s to analyse the effect of plant opening on knowledge spillovers to local inventors. We use a difference-in-differences identification strategy exploiting information on the revealed ranking of possible locations for large plants in the US. Under the identifying assumption that locations not chosen (losers) are a counterfactual for the chosen location (winner), we find that patents of these large corporations are 68% more likely to be cited in the winning counties relative to the losing counties after entry. The effect materializes after the opening of the plant, rather than after the entry decision itself. The increase in citations is stronger for more recent patents whereas patent quality does not seem to play an important role. We find that the increase in citations is larger from patents belonging to the same technology class of the cited patent.

Keywords: productivity; innovation; knowledge diffusion (search for similar items in EconPapers)
JEL-codes: O3 R11 R12 (search for similar items in EconPapers)
Date: 2016-08-03
New Economics Papers: this item is included in nep-geo, nep-ino, nep-knm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Colocation and knowledge diffusion: evidence from million dollar plants (2016)
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