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Is distance dying at last?: falling home bias in fixed-effects models of patent citations

Griffith, Rachel and Lee, Sokbae and Van Reenen, John (2011) Is distance dying at last?: falling home bias in fixed-effects models of patent citations. Quantitative Economics, 2 (2). pp. 211-249. ISSN 1759-7323

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Identification Number: 10.3982/QE59


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.

Item Type: Article
Official URL:
Additional Information: © 2011 The Authors
Subjects: H Social Sciences > HB Economic Theory
Sets: Departments > Economics
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 23 Feb 2012 16:31
Last Modified: 22 Aug 2012 10:50

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