The Demise of Distance? The Declining Role of Physical Distance In Knowledge Transmission

The economics literature clearly shows that the transmission of knowledge diminishes with physical distance, a factor contributing to industrial clustering. This paper investigates how those distances have stretched over time. We measure the physical distance between collaborating inventors, as well as distances between inventors and the technology cited in their patents. There is an obvious change over time while controlling for other factors, and we present interesting implications about the distance-dissolving effects of the communication revolution: firms and independent inventors benefit in distinctly different ways, while some states and technology classes are obvious winners over their peers.