Is Distance Dying at Last? Falling Home Bias in Fixed Effects Models of Patent Citations

Rachel Griffith (), Sokbae (Simon) Lee () and John van Reenen ()

No 6435, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We examine the 'home bias' of international knowledge spillovers as measured by the speed of patent citations (i.e. knowledge spreads slowly over international boundaries). We present the first compelling 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 citations between 1975 and 1999. Home bias declines substantially when we control for fixed effects: there is practically no home bias for the more 'modern' sectors such as pharmaceuticals and information/communication technologies.

Keywords: fixed effects; home bias; knowledge spillovers; patent citations (search for similar items in EconPapers)
JEL-codes: F23 O32 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino, nep-ipr and nep-knm
Date: 2007-09
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Related works:
Working Paper: Is Distance Dying at Last? Falling Home Bias in Fixed Effects Models of Patent Citations (2007)
Working Paper: Is Distance Dying at Last? Falling Home Bias in Fixed Effects Models of Patent Citations (2007)
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