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This paper studies geographic localization of academic and industrial knowledge spillovers. Using data on US research and development laboratories that quantify spatial aspects of learning about universities and firms as well as the locations of closely affiliated universities and firms, I find that academic spillovers are more localized than industrial spillovers. I also find that localization is increased by nearby stocks of R&D, but reduced by laboratory and firm size. These results on localized academic spillovers reflect the dissemination of normal science and the industry–university cooperative movement, which encourage firms to work with nearby universities, so that geographic localization coincides with the public goods nature of academic research. This situation contrasts with relations to other firms, where contractual arrangements are often needed to access proprietary information, often at a considerable distance.
James D. Adams (Mon,) studied this question.