How do geographical, social and technological proximity influence knowledge spillovers? Evidence from patent citations

Abstract

This paper explores the relationships among three fundamental determinants of knowledge spillovers that have hitherto been analyzed only separately: geographical,socialand technological proximity. Using a data set constituting of U.S. patent citations (cited, citing and control patents), we find that these determinants interact in surprising ways to explain different patterns of knowledge spillovers.Our results revealed that although geographical, social and technological proximity both increase the probability of citations between patents, the marginal benefit of social proximity is greater for patents which are technologically distant. They also showed that the marginal benefit of geographical proximity is greater for patents which are socially distant. Additionally, we reported that the marginal benefit of technological proximity is greater for patent which are geographically distant. These findings indicate that studying one of the determinants separately can yield biased results, as their net effect may change when the moderating effects of the other determinants are considered. Research on localized knowledge spillovers, regional industrial clusters, location choice of R&D and knowledge transfers by multinational enterprises therefore needs to be broadened by analyzing multiple determinants of knowledge spillovers.