Disparities in exploitative and exploratory patenting performance across regions: Focusing on the roles of agglomeration externalities

Abstract

AbstractWe try to identify the determinants of regional variation in both exploitative and exploratory innovative competencies. Hereby, we focus on how a knowledge‐creation mechanism with specialized externalities differs from one with diversified externalities. Innovative competence in the US is measured by local patenting performance; exploitative and exploratory patenting performances are distinguished by the degree of backward citation. Based on the extended knowledge‐production function, including the two agglomeration externalities, our findings show that specialized externalities are associated with exploitation, while diversified externalities are positively related with both exploration and exploitation, regardless of industrial sectors.