The relationship of policy induced R&D networks and inter-regional knowledge diffusion

Knowledge diffusion is argued to be strongly influenced by knowledge networks and spatial structures. However, empirical studies primarily apply an indirect approach in measuring their impact. Moreover, little is known about how policy can influence the spatial diffusion of knowledge. This paper seeks to fill this gap by testing empirically the effects of policy induced knowledge networks on the propensity of inter-regional patent citations. We use patent citation data for 141 labor market regions in Germany between 2000 to 2009, which is merged with information on subsidized joint R&D projects. Based on the latter, we construct a network of subsidized R&D collaboration. Its impact on inter-regional patent citations is evaluated with binomial and negative binomial regression models. Our findings do not indicate that inter-regional network links created by public R&D subsidies facilitate patent citations and, hence, inter-regional knowledge diffusion.