Foreignness and the diffusion of ideas

Abstract

Abstract Scholars of innovation recognize that knowledge flow displays geographic clustering, and therefore innovations developed in remote regions diffuse less widely and/or rapidly. At the same time scholars have also established that discoveries or inventions combining otherwise disconnected knowledge clusters tend to be more novel, and therefore will ultimately diffuse more widely and/or rapidly. In analysis of the citations received by US patents, a common measure of the technical and economic importance of technology, we find that cross-state collaborations do indeed result in higher rates of citation relative to new inventions where all inventors are located in the same region. Furthermore, the liability associated with foreignness, the lower rate of diffusion expected for inventions developed outside the United States, is overcome in cases of US/international collaboration. Finally, in order to determine whether the constraint with crossing political borders is constant or variable, we explore the issue of diffusion across international borders in more detail, examining citations from US inventors to US patents with a non-US origin. We find that citation rates are highest for US patents from nations with legal systems most consonant with US institutions.