Author : Jihong Lee(Seoul National Univ.), Yunmi Nam(Bank of Korea)

This paper studies localization effects of knowledge spillovers in Korea using U.S. patents granted over the period 1996-2015. The “sample-matching” analysis initiated by Jaffe, Trajtenberg, and Henderson (1993) is adopted. We do not find evidence of positive localization effects in Korea. In particular, controlling for the existing geographic distribution of knowledge production, the frequency of domestic citations of Korean patents is no more than the citation frequency from overseas, and the difference is decreasing within the sample period. We also examine localization effects across regions and industries, and compare Korea with Taiwan and Japan.