Knowledge spillovers and patent citations: Trends in geographic localization, 1976-2015

This paper examines the trends in geographic localization of knowledge spillovers via patent citations, considering US patents from the period of 1976-2015. Despite accelerating globalization and widespread perception of the \death of distance," our multi-cohort \matched-sample" study reveals significant and growing localization effects of knowledge spillovers at both intra- and international levels after the 1980s. We also develop a novel network index based on the notion of \farness," which an instrumental variable estimation shows to be a significant and sizable determinant of the observed trends at the state-sector level.