  Access to external knowledge sources through localized knowledge spillovers
is an important determinant of the innovative capabilities of firms. However,
the geographical extent of knowledge spillovers is not well understood. In this
article we use patent citations in the UK as a proxy of knowledge flows and
analyze the spatial extent of knowledge spillovers relative to the distribution
of existing knowledge creation. We find that local, regional and country
specific institutional factors play an important role in influencing the
probability of knowledge spillovers and that most knowledge spillovers are
exhausted within an extended commuting boundary. It is also shown that these
effects have increased over time and that the spatial extent of knowledge
spillovers varies by industry.
