How localised are knowledge spillovers? Evidence from microgeographic data on UK patent citations

We model the spatial characteristics of technological knowledge flows in the UK. Using a novel and highly accurate dataset of inventor locations, we test for localisation of knowledge spillovers in citations between UK patent applications from 1982 to 2015. We apply continuous distance localisation tests separately to patent citations in 313 technologies and find that spillovers are localised in far fewer technologies and at shorter distances than previous studies have suggested. Only 30% of technologies in the UK display localisation, knowledge spillovers decay rapidly at distances between 30 and 80 km, and spillovers within technologies are twice as frequently localised as spillovers between technologies. Our results suggest that technological and geographical proximity are important determinants of knowledge spillovers in the UK and that close physical proximity is particularly relevant for industrial sectors that are more reliant on tacit knowledge.