Spatial knowledge spillovers and university research: Evidence from Austria

This paper provides some evidence on the importance of geographically mediated knowledge spillovers from university research activities to regional knowledge production in high-technology industries in Austria. Spillovers occur because knowledge created by universities has some of the characteristics of public goods, and creates value for firms and other organisations. The paper lies in the research tradition that finds thinking in terms of a production function of knowledge useful and looks for patents as a proxy of the 'output' of this process, while university research and corporate R&D investment represent the 'input' side. We refine the classical regional knowledge production function by introducing a more explicit measure to capture the pool of relevant spatial academic knowledge spillovers. A spatial econometric approach is used to test for the presence of spatial effects and – when needed – to implement models that include them explicitly. The empirical results confirm the presence of geographically mediated university spillovers that transcend the spatial scale of political districts. They, moreover, demonstrate that such spillovers follow a clear distance decay pattern.