We need to talk – or do we? Geographic distance and the commercialization of technologies from public research

Abstract

Using a new dataset with detailed geographic information about licensing activities of the German Max Planck Society, we analyze how the probability and magnitude of commercial success are affected by geographic distance between licensors and licensees. Our evidence suggests that proximity does not generally lead to superior commercialization outcomes. A significantly negative association between distance and commercialization success is identified only for foreign licensees within the subsample of inventions licensed to more than one firm. Positive associations between distance and performance indicators are not robust to controlling for invention quality or selection into licensing.