International knowledge diffusion and home-bias effect. Do USPTO and EPO patent citations tell the same story?

This paper estimates the international diffusion and obsolescence of technological knowledge by technological field and country using patent citations from the U.S. Patent and Trademark Office (USPTO) and from the European Patent Office (EPO). We control for self-citations and for procedural and legal differences between patent offices in the citation procedures using equivalent patents. We show that (1) both at the EPO and USPTO domestic citations come sooner and there is a strong localization effect of patent citations at national level; (2) the US technological system is becoming less central in the international web of knowledge flows; (3) some differences across patent offices emerge in the ranking by technological fields in the speed of diffusion and decay of technological knowledge. We support the conjecture that not only technological opportunities but also absorptive capacity plays a role. Finally on the methodological side we show that at the USPTO the median citation lag is twice as large relatively to the citations at the EPO, that some bias is induced by the different institutional practices at the EPO and USPTO and that using patent families generates a selection bias towards high quality patents.