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An Examination of the Role of Local and Distant Knowledge Spillovers on the US Regional Knowledge Creation

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International Regional Science Review

Published online on

Abstract

This article examines the role of academic and private R&D spending in the frame of a knowledge production function estimated across 3,109 US counties. We distinguish the role of local, face-to-face, knowledge spillovers that are determined by geographical proximity from distant spillovers captured by a matrix of patent creation–citation flows. The advantage of the latter matrix is its capacity to capture the direction of the spillovers. We control for the spatial heterogeneity between metropolitan and nonmetropolitan counties as well as between states. Our empirical results show that spillovers due to private knowledge contribute to higher returns in metropolitan counties than in nonmetropolitan regions. On the other hand, knowledge created in the academia leads to spillovers displaying spatially homogeneous returns. Our results imply that future innovation policies need to grasp more fully the role of distant knowledge spillovers, especially those generated in the academia, and recognize better the presence of heterogeneity in the sources and location of knowledge creation.