Spreading the Word: Geography, Policy and University Knowledge Diffusion

Using new data on citations to university patents and scientific publications, and measures ofdistance based on Google maps, we study how geography affects university knowledgediffusion. We show that knowledge flows from patents are localized in two respects: theydecline sharply with distance up to about 100 miles, and they are strongly constrained bystate borders, controlling for distance. While distance also constrains knowledge spilloversfrom publications, the state border does not. We investigate how the strength of the stateborder effect varies with university and state characteristics. It is larger for patents frompublic, as compared to private, universities and this is partly explained by the localdevelopment policies of universities. The border effect is larger in states with stronger noncompetelaws that affect intra-state labor mobility, and those with greater reliance on in-stateeducated scientists and engineers. We confirm the impact of non-compete statutes bystudying a policy reform in Michigan that introduced such restrictions. Read the complete study for the Centre for Economic Performance here.