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Colocation and knowledge diffusion: evidence from million dollar plants

Fons-Rosen, Christian, Scrutinio, Vincenzo and Szemeredi, Katalin (2016) Colocation and knowledge diffusion: evidence from million dollar plants. CEP Discussion Paper (1447). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

This paper uses the entry of large corporations into U.S. counties during the 1980s and 1990s to analyse the effect of plant opening on knowledge spillovers to local inventors. We use a difference-in-differences identification strategy exploiting information on the revealed ranking of possible locations for large plants in the US. Under the identifying assumption that locations not chosen (losers) are a counterfactual for the chosen location (winner), we find that patents of these large corporations are 68% more likely to be cited in the winning counties relative to the losing counties after entry. The effect materializes after the opening of the plant, rather than after the entry decision itself. The increase in citations is stronger for more recent patents whereas patent quality does not seem to play an important role. We find that the increase in citations is larger from patents belonging to the same technology class of the cited patent.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/
Additional Information: © 2017 The Authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HD Industries. Land use. Labor
JEL classification: O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 09 Sep 2016 14:47
Last Modified: 20 Nov 2019 04:57
Funders: Economic and Social Research Council, Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/67683

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