Do important inventions benefit from knowledge originating in other technological domains?

A frequently made claim in the innovation literature is that important inventions involve the transfer of new knowledge from one technological domain to another. This study uses U.S. patents granted from 1976 to 2006 to identify the role of knowledge acquired from outside each patent's technological domain. Our results do not seem to support the claim above. Increasing citations to external prior art is a significantly less important predictor of forward citation frequency than citing prior art that is technologically closer. This result is robust across several model specifications and ways of defining whether each flow of knowledge is external. The result is even stronger in the most highly cited technology categories. We discuss possible explanations for this apparently negative impact of external knowledge—including both measurement issues and challenges associated with assimilating disparate knowledge.