The localization of knowledge and the mobility of engineers in regional networks

Knowledge, once generated, spills only imperfectly among firms and nations. We positthat since institutions and labor networks vary by region, there should be regional variations in the localization of spillovers. We investigate the relationship between the mobility of major patent holders and the localization of technological knowledge through the analysis of patent citations of important semiconductor innovations. We find that knowledge localization is specific to only certain regions (particularly Silicon Valley) and that the degree of localization varies across regions. By analyzing data on the interfirm mobility of patent holders, we empirically show that the interfirm mobility of engineers influences the local transfer of knowledge. The flow of knowledge is embedded in regional labor networks. (Knowledge; Spillovers; Mobility; Regions; Networks) Ideas, because they have no material content, should be the least spatially-bounded of all economic activi-ties. Being weightless, their transport is limited only by the quality and availability of communication. Since ideas serve both as the inputs and outputs in their own production, their location need be con