INTERNATIONAL TRANSFER OF KNOWLEDGE - THE ROLE OF INTERNATIONAL-TRADEAND GEOGRAPHIC PROXIMITY

The paper examines empirically the effect of international trade and g eographic proximity on knowledge inflow to Sweden. Swedish patent data is used to trace knowledge flows. Both geographic proximity and inter national trade are in a first estimation found to affect knowledge flo ws. An extreme bounds analysis is conducted on the estimated coefficie nts. The coefficient for geographic proximity is sensitive to the choi ce of included variables but the coefficient for international trade i s robust. The paper concludes therefore, that international trade faci litates the exchange of knowledge.