Localization of Knowledge Spillovers and Agglomeration of R&D Activities: Evidence from China´s Provincial Data

Knowledge spillovers have been used to explain the increased rate of innovation that is found in R&D clusters. We estimate a knowledge production function for industrial R&D Activities using China´s Provincial data. Controlling for R&D expenditures, R&D personnel and R&D expenditure by colleges, We investigate the link at a regional level between localization of knowledge spillovers and R&D activities clustering. The results indicate that R&D spillovers are localized and it has an obvious spatial attenuation effect.