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The development of new industries demands access to local capabilities. Little attention has yet been paid to the role of spillovers from neighbour regions for industrial diversification, nor has the role of network linkages between neighbour regions been investigated. As the spread of capabilities has a strong geographical bias, we expect regions to develop new industries in which their neighbour regions are specialized. To test this hypothesis, we analyse the development of new industries in US states during the period 2000-2012. We show that a US state has a higher probability of developing a comparative advantage in a new industry if a neighbour state is specialized in that industry. We also show that neighbour US states have more similar export structures. This export similarity seems to be explained by higher social connectivity between neighbour states, as embodied in their bilateral migration patterns. [ABSTRACT FROM AUTHOR]

This article examines the role of academic and private R&D spending in the frame of a knowledge production function estimated across 3,109 US counties. We distinguish the role of local, face-to-face, knowledge spillovers that are determined by geographical proximity from distant spillovers captured by a matrix of patent creation-citation flows. The advantage of the latter matrix is its capacity to capture the direction of the spillovers. We control for the spatial heterogeneity between metropolitan and nonmetropolitan counties as well as between states. Our empirical results show that spillovers due to private knowledge contribute to higher returns in metropolitan counties than in nonmetropolitan regions. On the other hand, knowledge created in the academia leads to spillovers displaying spatially homogeneous returns. Our results imply that future innovation policies need to grasp more fully the role of distant knowledge spillovers, especially those generated in the academia, and recognize better the presence of heterogeneity in the sources and location of knowledge creation. [ABSTRACT FROM AUTHOR]