Proximity and knowledge spillovers: Evidence from the introduction of new airline routes

Venue: Room 418, School of Economics, Yuquan Campus

Speaker: Dr. ZHOU Sifan

ZHOU Sifan, Assistant Professor at School of Economics and Wangyanan Institute for Studies in Economics (WISE) at Xiamen University since 2017. Sifan received her PhD in economics from University at Albany, State University of New York, in 2015. Before joining Xiamen University, she worked as a postdoctoral research fellow at the Center of Mathematical Sciences and Applications at Harvard University. Sifan specializes in labor economics and economics of science, innovation, and technology. She is particularly interested how workers, firms, and universities behave and interact with each other in the production, diffusion, and application of sciences and technologies; and how policy makers, at both local and national level, can optimally intervene these behaviors and interaction.

Abstract:

Access to knowledge is highly unequal in space. Due to that geographic distance is fixed over time, it has been a challenge to the literature to tell whether localized knowledge diffusion leads to spatial concentration of knowledge or the other way around. Employing patent citation data from United States Patent and Trademark Office (USPTO) to measure between-city knowledge flow and using the introduction of new airline flight routes as a source of exogenous variation to proximity, we find that holding geographic distance the same, travel time reduction increases knowledge diffusion. The results are robust when we control for knowledge-sourcing city-level and knowledge-destination city-level shocks that could potentially drive the introduction of new airline routes, and when we consider only new airline routes that are the outcome due to the opening of a new hub. We find the effects are stronger for inventor citations than for examiner citations, for cities with higher absorptive capacity, and for technology areas whose frontiers advance fast than for those that are more mature and stable. We discuss the implications of these findings in terms of how knowledge diffusion affects the volume and the direction of future innovation.