It's a Small(er) World: The Role of Geography and Networks in Biotechnology Innovation

Using patent citation data for the U.S., we test whether knowledge spillovers in biotechnology are sensitive to distance. Controlling for self-citation by inventor, assignee and examiner, cohort-based regression analysis shows that spillovers are local but that distance is becoming less important with time. Network analysis paints a picture of a stable network between states, but a changing environment between individual actors, with a growing importance of connectedness. The popular maxim that everyone is connected by six degrees of separation is tested with surprising results.