Who collaborates with whom: the role of technological distance in international innovation

This paper aims at investigating the role of technological distance in the globalized productionof innovation. It uses aggregate patent-based indicators for a unique panel datasetcovering international co-inventions between 29 countries across 21 industries between1988 and 2005. The empirical findings show a dual impact of technological distance onthe intensity of international collaborative innovation at the industry level. On the onehand, the more similar the industry-specific knowledge of two countries, the more easilythey collaborate by sharing common industrial knowledge. On the other hand, the moredifferent their non-industry-specific knowledge, the more they collaborate to gain accessto broad and interdisciplinary expertise. It suggests that the relative absorptive capacitybetween partner’s economies and the search for novel and complementary knowledge arekey drivers of the globalization of innovation. Moreover, the results confirm the additionaleffect of non-technological distance factors (spatial proximity, ease of communication, institutionalproximity, overall economic ties) in cross-border innovative relationships.