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Access to external knowledge sources through localized knowledge spilloversis an important determinant of the innovative capabilities of firms. However,the geographical extent of knowledge spillovers is not well understood. In thisarticle we use patent citations in the UK as a proxy of knowledge flows andanalyze the spatial extent of knowledge spillovers relative to the distributionof existing knowledge creation. We find that local, regional and countryspecific institutional factors play an important role in influencing theprobability of knowledge spillovers and that most knowledge spillovers areexhausted within an extended commuting boundary. It is also shown that theseeffects have increased over time and that the spatial extent of knowledgespillovers varies by industry.

Revealing the spatial extent of patent citations in the UK: How far does knowledge really spillover?