Essays on Knowledge Spillovers and Transfer of Technical Knowledge

Abstract

This dissertation explores the localized nature of knowledge spillovers and the role of intellectual property rights, particularly patents, in facilitating transfer of technical knowledge embodied in inventions. The first study examines the assumption that localization of patent citations reflects localization of knowledge spillovers. By identifying a set of citations that are unlikely to capture knowledge spillovers and comparing the extent of their localization with that of the rest of the citations, the study shows that either patent citations do not adequately capture knowledge spillovers or knowledge spillovers are not localized. The second and third studies examine the effect of patent scope on follow-on invention and on licensing decisions of inventors, respectively, by employing a novel method that exploits an exogenous variation in patent scope. The studies show that reduced patent scope of an invention leads to a decline in the number of citations that the invention receives and a drop in licensing propensity of inventors. At the same time, the findings also show that there is a substantial variation in the effect of patent scope on both follow-on invention and licensing propensity across different invention and inventor characteristics as well as across technology areas.