The spatial dimension of patenting by multinational firms in Europe

Abstract

We investigate the spatial pattern of patenting by the world's largest multinational enterprises (MNEs). Based on a summary of the theoretical literature, we expect spatial concentration of patenting by these large MNEs. A database is developed that provides information on MNE patenting from European regions. This database is used to describe a number of features of the spatial pattern of patenting by MNEs in Europe. The main findings are that MNEs patenting is strongly concentrated in a relatively small number of regions, and that the share of foreign patenting in total patenting varies greatly by firm. We use patent citations to measure the spatial concentration of knowledge flows between firms, and within the same firm between different regional locations. For the majority of cases, we find that units between which patent citations occur are located relatively near to each other, which indeed points to the spatial character of patent citations. This holds for between-firms citations and within-firms citations. Moreover, we find a distinct time pattern associated to knowledge flows: the spatial scope of these flows first broadens but then narrows down again.