Which travels farther? Knowledge or rivalry?

Abstract

Bringing firms together generates knowledge spillovers which in turn creates innovation and economic growth. However, firm interactions also generate market rivalry. Unlike knowledge spillovers, we know little over the geographic reach of market rivalry. The paper aims to provide a rigorous comparison of these two channels in a large scale. It approximates knowledge spillovers with the staple metric of patent citations. For market rivalry, the metric of trademark oppositions is proposed. The baseline analysis is at the EUIPO, for trademark oppositions, and EPO for patent citations. The country level and NUTS-3 analyses show that there is stronger home bias for knowledge spillovers compared to market rivalry. To provide robustness, similar data are computed for the USPTO, the most populous patent and trademark office in the world, and an office with substantially fewer trademark oppositions due to its different procedures. State- and county-level analyses provide similar results to the baseline analysis.