Borders aren’t just barriers to the movement of people, goods, and services. They can prevent ideas from spreading as well. That’s the conclusion of recent paper published in Management Science by Jasjit Singh of Singapore’s INSEAD business school and Matt Marx of MIT.
To measure the effect, the authors looked at more than 4 million citations of private-sector patents between 1975 and 2004. They found, as MIT News summarizes, that “citations of patents among firms are 1.3 times as likely to spread a comparable distance when within one country, and not crossing any borders; more than two times as likely to spread a comparable distance when within a U.S. state; and nearly three times as likely to spread when within one metropolitan region within a state.”
The authors argue that the border effect persists at different levels of geographic distance. In other words, researchers are much less likely to cite a patent generated just 20 miles away if there's a state or national border in the middle:
Surprisingly, in the case of national borders, they found that “contrary to the widespread notion that the importance of distance has been eroding over time due to globalization and technological advancement, the decay in citation rate with distance seems to have increased over time… U.S. inventors seem to be disproportionately relying upon knowledge generated within the U.S. even as the fraction of patents originating overseas has grown.”
The state border effect is even more surprising in an era when you might expect the easy availability of information online to erode the effect of distance, but it seems innovation still has some trouble crossing state lines.
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