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Localised Knowledge Spillovers (LKS)

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lightbulbAbout this topic
Localized Knowledge Spillovers (LKS) refer to the phenomenon where knowledge and innovations generated in a specific geographic area are shared among firms and individuals, enhancing productivity and fostering economic growth within that locality. This process often occurs through informal interactions, networks, and collaborations, facilitating the diffusion of ideas and expertise.
lightbulbAbout this topic
Localized Knowledge Spillovers (LKS) refer to the phenomenon where knowledge and innovations generated in a specific geographic area are shared among firms and individuals, enhancing productivity and fostering economic growth within that locality. This process often occurs through informal interactions, networks, and collaborations, facilitating the diffusion of ideas and expertise.

Key research themes

1. How do spatial and technological proximities mediate the intensity and direction of localised knowledge spillovers?

This research area investigates the role of geographical closeness and technological similarity or diversity in facilitating effective knowledge diffusion among firms, regions, and institutions. It focuses on understanding how localised spillovers emerge from intra- and inter-regional interactions, and how proximity conditions the magnitude and direction of these spillovers. These insights matter for regional innovation policies and cluster strategies aiming to enhance knowledge flows and foster innovation.

Key finding: The study finds that both spatial proximity and technological proximity significantly enhance knowledge spillovers between European regions. Importantly, the interaction between spatial and technological proximity modulates... Read more
Key finding: This paper empirically demonstrates that relational proximity, proxied by similarity in trust levels between regions, positively affects knowledge spillovers beyond mere geographic closeness in EU regions. It further shows a... Read more
Key finding: The paper distinguishes tacit and explicit knowledge in clusters, arguing that knowledge spillovers within clusters are primarily mediated by tacit knowledge accessible through close interaction and geographical proximity.... Read more

2. What mechanisms and firm-level channels facilitate localised knowledge spillovers and how do labor mobility and firm heterogeneity shape these effects?

This theme explores micro-level pathways through which knowledge diffuses locally, including worker mobility, vertical and horizontal linkages between firms, and firm-specific characteristics such as technological similarity and absorptive capacity. The studies investigate how labor flows convey tacit knowledge beyond firm boundaries and how firm heterogeneity impacts the magnitude and direction of spillovers. Understanding these mechanisms is crucial for targeted policies enhancing knowledge-based productivity growth.

Key finding: The paper synthesizes evidence showing that labour mobility, vertical linkages, and demonstration effects are key individual channels for knowledge spillovers from multinational enterprises to local firms. It further... Read more
Key finding: Using matched employer-employee data and exploiting an innovation program in Argentina as an exogenous shock, the study identifies labor mobility as a critical conduit for knowledge spillovers. Firms hiring workers exposed to... Read more
Key finding: Analyzing granular four-digit sector data in Europe, this paper finds that foreign direct investment (FDI) spillovers to domestic firms depend critically on technological similarity and vertical relationships. Horizontal... Read more

3. How do sources of knowledge spillovers differ between human capital formation and codified research outputs in shaping firm and regional productivity?

This theme examines the relative contributions of human capital spillovers (graduates and skilled workers) versus codified knowledge spillovers (university research output, publications, patents) on innovation and productivity at firm and regional levels. The role of spatial proximity, institutional quality, and absorptive capacity in modulating these spillovers is investigated. Differentiating these sources has direct implications for innovation policy and university-industry interactions.

Key finding: Employing a comprehensive employer-employee matched dataset from Taiwan, this study quantifies that a 1% increase in the proportion of higher-educated employees within a city boosts local plant productivity by approximately... Read more
Key finding: By integrating European microdata on universities and firms, the study reveals that spillovers from human capital formation (education of graduates) exert a stronger positive effect on firm performance metrics (turnover,... Read more
Key finding: This cross-country econometric study demonstrates that knowledge spillovers positively influence total factor productivity (TFP), but that this effect is conditional on a certain threshold of institutional quality. Countries... Read more

All papers in Localised Knowledge Spillovers (LKS)

In this article, we make two important contributions to the literature on clusters. First, we provide a broader theory of cluster connectivity that has hitherto focused on organization-based pipelines and MNE subsidiaries, by including... more
The paper throws new light on the debate about the role played by local knowledge spillovers (LKS) as a driver of regional innovative activity. It transcends the regional level of analysis that has been commonly adopted in the literature... more
In the continuing debate about the positive versus negative effects of inward investments in a host economy, a new perspective has arisen from new firms' strategy nowadays to internationalise their activity. One aspect is that knowledge... more
Whether international R&D spillovers are global and trade-related is still a debated issue. By adopting two specifications that nest models previously estimated in the literature, we test the hypothesis that international R&D spillovers... more
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