Localization of knowledge and the mobility of engineers in regional networks

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Citation: Paul Almeida, Bruce Kogut (1999) Localization of knowledge and the mobility of engineers in regional networks. Management Science (RSS)
Internet Archive Scholar (fulltext): Localization of knowledge and the mobility of engineers in regional networks
Tagged: Business (RSS) Economics (RSS), Spillovers (RSS), Geography (RSS)

Summary (Abstract)

Paul Almeida and Bruce Kogut aims to build on the work of Jaffe, Trajtenberg and Henderson (1993) and unpack the dynamics of knowledge spillovers. The paper shows that knowledge spillovers are specific to particular regions (particularly Silicon Valley) and that these spillovers tends to correspond to regions where inter-firm mobility is higher. In other word, policy changes that affect mobility between firms (i.e., non-compete agreements) show that, "the flow of knowledge is embedded in regional labor markets."

The paper borrows the methodology for measuring spillovers from Jaffe, Trajtenberg and Henderson (1993) and, as a result, may or may not be subject to the same criticism leveled at that paper by Thompson and Fox-Kean (2005). The authors focus on the semiconductor industry only and builds on the largely ethnographic results of Saxenian's (1994) comparison of Silicon Valley and Boston's Route 128 areas. The paper sets out to measure if, and why, spillovers happen in semiconductors.

The results confirm the basic results by Jaffe et al. (1993) and show an effect of spillovers. That said, they find that the result is significantly larger for Silicon Valley than for any other area. They find that even controlling for a variety of measures and through a number of robustness checks, mobility has a significant and positive effect on the probability that a patent will build upon (shown by citing) a major patent from the same region.

Theoretical and Practical Relevance

Almeida and Kogut's paper has been cited nearly 1000 times in the 11 years since it was published. It is a key cite in the literature on knowledge-transfer, spillovers, and the geography of knowledge.