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CEP discussion paper
No inventor is an island: social connectedness and the geography of knowledge flows in the US
Andreas Diemer and Tanner Regan November 2020
Paper No' CEPDP1731:
Full Paper (pdf)

JEL Classification: O33; R12; Z13

Tags: knowledge flows; diffusion; social connectedness; informal networks

Do informal social ties connecting inventors across distant places promote knowledge flows between them? To measure informal ties, we use a new and direct index of social connectedness of regions based on aggregate Facebook friendships. We use a well-established identification strategy that relies on matching inventor citations with citations from examiners. Moreover, we isolate the specific effect of informal connections, above and beyond formal professional ties (co-inventor networks) and geographic proximity. We identify a significant and robust effect of informal ties on patent citation. Further, we find that the effect of geographic proximity on knowledge flows is entirely explained by informal social ties and professional networks. We also show that the effect of informal social ties on knowledge flows: has become increasingly important over the last two decades, is higher for older or `forgotten' patents, is more important for new entrepreneurs or `garage inventors', and is somewhat stronger across distant technology fields.