Distance (still) hampers diffusion of innovations

Abstract

This paper employs goods and services descriptions from US trademarks to study spatial diffusion of innovations. Identifying novel, fast-spreading tokens (words) in trademark descriptions, we outline patterns of regional innovation and estimate how distance affects diffusion. Novel trademark tokens are frequently new to English, they capture many unpatented innovations, and their appearance in language co-evolves with their use in intellectual property filings. We analyse the introduction of novel tokens to capture the emergence of innovations and show that spatial distance affects their diffusion. Estimating the intensity of diffusion between locations in the United States, we confirm strong, negative effects of distance.