Localization of Collaborations in Knowledge Creation

This study investigates the localization of collaborative works in knowledge creation, using data on Japanese patent applications. Applying distance-based methods, we obtained the following results. First, collaborations are significantly localized at the 5% level, within a localization range of approximately 100km. Second, the extent of localization was stable during 1986-2005 despite extensive developments in information and communications technology that facilitate communication between remote organizations. Third, the extent of localization is substantially greater in inter-firm collaborations than in intra-firm collaborations. Furthermore, in inter-firm collaborations, the extent of localization is greater in collaborations with small firms. This suggests that geographic proximity mitigates firm-border effects in collaborations, especially for small firms.