Localization of Knowledge-creating Establishments

Author Name INOUE Hiroyasu (Osaka Sangyo University) / NAKAJIMA Kentaro (Tohoku University) / SAITO Yukiko (Senior Fellow, RIETI)
Creation Date/NO. August 2014 14-E-053
Research Project Inter-organizational and Inter-inventors Geographical Proximity and Networks
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This study investigates the localization of establishment-level knowledge creation by using data from the Japanese patent database. Using distance-based methods, we obtained the following results. First, Japanese patent-creating establishments are significantly localized at the 5% level, with the range of localization at approximately 80 km. Second, localization was found for all patent technology classes, while the extent of localization differs among the classes. Third, the extent of localization is stronger in more creative establishments, in terms of both the number of patents created and the number of citations. These results suggest that geographical proximity is important for knowledge spillover regardless of the concerned technology and that creative establishments require external knowledge.

Published: Inoue, Hiroyasu, Kentaro Nakajima, and Yukiko U. Saito, 2017. "Localization of knowledge-creating establishments," Japan and the World Economy, Vol. 43, pp. 23-29