Internalization of knowledge spillovers by regions: a measure based on self-citation patents

Abstract

Previous papers have approached direct and indirect self-citations at a firm-level considering that firms that internalize more self-knowledge are also those with a more accumulated stock of knowledge, which translates into greater absorptive capacity. When these firms internalize their own knowledge, they are appropriating the returns of their own previous investments in R&D. This paper applies an indirect self-citation measure as a proxy for absorptive capacity of knowledge spillovers in regions to test whether specialization in more basic knowledge technologies facilitates or hampers the internalization of knowledge spillovers. Based on patent citation information from the Organization for Economic Co-operation and Development patent database and other control variables, we estimate a zero-inflated negative binomial model encompassing 645 NUTS-2 regions from 44 countries. The main results show that regions with a higher level of basic technological knowledge are more likely to internalize knowledge spillovers.