The Impact of Gravity-Weighted Knowledge Spillovers on Productivity in Manufacturing

This paper tests for localized knowledge spillovers from out-of-state innovations in U.S. manufacturing from 1977 to 1997. The source of these spillovers is innovations categorized into six technologies based on U.S. patent classes and patent data. Using a gravity-weighting for out-of-state innovations, knowledge spillovers are found from mechanical technologies and drug and medical technologies for a broad group of manufacturing industries. Innovations from chemical-related technologies are found to generate spillovers for the Chemical and Allied Products Industry and for the Transportation Equipment Industry. Additionally, specialization of production at the two-digit Standard Industrial Classification of industry level is also found to increase state-level productivity in manufacturing.