INTERNATIONAL KNOWLEDGE FLOWS: Econometric issues and interpretation 3

Variations in p, (by attributes of either the cited or the citing patents) imply differences in the timing of citations across categories of patents. Higher values of P, mean higher rates of decay, which pull the citations function downwards and leftward. In other words, the likelihood of citations would be lower everywhere for higher pi5 and would peak earlier on. Thus a higher a means more citations at all lags; a lower P, means more citations at later lags.

When both a and p, vary, the citation function can shift upward at some lags while shifting downward at others. For example, if a for citations from Japan to Japan is 2.32 and the pt for Japan to Japan is 1.54, this implies that the likelihood of citation in early years is higher than the base group, but because of the higher p„ this difference fades over time. Because obsolescence is compounded over time, differences in p, eventually result in large differences in the citation frequency. If we compute the ratio of the likelihood of citations for Japan-to-Japan relative to U.S.-to-U.S. using these parameters, we find that one year after being granted, Japan-to-Japan citations are about twice as likely as U.S.-to-U.S., but nine years down the road the frequencies for the two groups are about the same, and at a lag of 20 years Japan-to-Japan citations are actually about 70% less likely than for the base category.


A final interpretation issue relates to citations from patents assigned to the same firm as is the cited patent, so-called “self-citations.” As discussed by Jaffe, Henderson and Trajtenberg (1993), self-citations cannot be regarded as evidence of spillovers.

Hence if we are interested in geographic localization of spillovers, we want to exclude self-citations. On the other hand, self-citations are an important indicator of the cumulative nature of technology, and of firms’ ability to appropriate the returns to their inventions. Thus for some purposes, such as assessing the overall role of technology in regional economic development, localization of citations inclusive of self-citations is of interest.!–more–