INTERNATIONAL KNOWLEDGE FLOWS: RESULTS 5

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Comparing Figure 2 to Figure 1 shows some of the effects of controlling for nongeographic effects. First, as suggested above, the “tails” in the estimated functions in Figure 2 are much thinner. Second, while geographic localization is clearly present in Figure 2, its magnitude is noticeably diminished, with the citation frequency for other countries at the modal lag being roughly 55-75% of U.S.-U.S. as compared to 40-60%.

In terms of the effects seen numerically in Table 3, the Figures show the “speed” of Japan, as its line typically peaks early and then fades, and the “slowness” of the U.S., whose predicted frequency of citation is the highest after long lags in all of the pictures. The graphs also show that the differences among non-domestic citing countries are always smaller than the localization effect that separates domestic citations from foreign ones.

Figures 2 to 6 generally show a pattern of “fading” of geographical localization. The combination of relatively high a and relatively high p, for domestic citations means that the initial domestic probability is much higher, but that it fades faster, so that other countries typically catch up eventually. This can be seen in the “crossing” of the domestic citation function with the others after 15 to 25 years. This phenomenon is also illustrated in Table 4, which gives the probability of citation from various countries relative to the domestic citation probability, for each cited country, in the first year and after 20 years.

For every cited country except the U.S., the relative citation frequency of the other countries is greater after 20 years than in the first year. Indeed, for Japan, every other country cites its twenty-year-old patents with greater frequency than it does itself. This results from the combined effect of fading of localization and the fact that Japan is generally a high-P, (fast-fading) maker of citations. Conversely, the lack of fading of geographic localization in citations to the U.S. reflects the general tendency of the U.S. toward low Pi (slow fading).

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