Knowledge Flows, R&D Spillovers and Innovation

Knowledge flows within and across countries should be carriers of important learning spillovers. We use data on 1.5 million patents and 4.5 million citations to analyze knowledge flows across 147 subnational regions. We estimate that only 15% of average knowledge is learned outside the average region of origin, and only 9% outside the country of origin. However, knowledge in highly technological sectors flows substantially farther and knowledge generated by technological leaders does also. If compared to trade flows, knowledge flows reach much farther. Moreover, external accessible knowledge has very strong external impact on innovation for a panel of 113 European and North American regions over 22 years.