Proximity and Innovation: Do Biotechnology Firms Located in the Paris Region Benefit from Localized Technological Externalities ?

This paper investigates the existence and characteristics of localized knowledge extemalities within the Paris region, lle-de-France, across biotechnology firms using business level data between 2000 and 2005. We test the combined effect of geographic and technological proximity on the firms' patent application level. Our results highlight and specify the role of geographic proximity for technologically related firms: knowledge spillovers are stronger when firms are located close to innovative neighbors specialized in the same technological domains.