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 CWP18/11, CeMMAP working papers from Centre for Microdata Methods and Practice, Institute for Fiscal Studies

Abstract:

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.

Date: 2011-05-24
New Economics Papers: this item is included in nep-geo, nep-ipr, nep-pr~ and nep-ure
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Citations: View citations in EconPapers (93)

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Related works:
Journal Article: Is distance dying at last? Falling home bias in fixed‐effects models of patent citations (2011)
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)
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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