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Knowledge spillovers are critical for innovation and new value creation in an increasingly knowledge-intensive economy. The substantial scholarly attention on knowledge spillovers has shown that there is a rapid distance decay associated with knowledge spillovers and that there is a positive state border effect. We show that the effects of distance, technology proximity, and the state border effect on knowledge flows are dependent on the size of the regions (MSAs) involved in the knowledge flow. Not accounting for innovation size (innovative communities and social relationships) in the flow of knowledge across origin-destination regions results in aggregation bias in the parameter estimates. Knowledge spillovers are more localized for small innovation MSAs than for large ones. Distance is not as much of a resistance factor in knowledge flow for larger innovation metro areas compared with smaller regions. Spatial origin and destination effects due to technology compatibility of neighboring regions do not affect the knowledge flow among large innovation MSAs, but do have an effect when small MSAs interact with large MSAs. [ABSTRACT FROM AUTHOR]

High growth and progressive regions possess a culture that promotes innovation. In-novation depends on a region's ability to use its own existing knowledge and knowledge generated elsewhere. This paper demonstrates the importance of the ability to absorb external knowledge in ex-plaining innovation productivity for 106 U.S. metropolitan areas. Using a spatial interaction model of patent citation flows with origin and destination dependence, the destination fixed-effects coefficients provides a measure of a region's absorptive capacity. We identify local conditions that shape a region's absorptive capacity and demonstrate it has a positive and significant impact on innovation productivity. [ABSTRACT FROM AUTHOR]

The article provides information on the role of money in determining election outcomes in the U.S. A reading of the Senate hearings on public financing of federal elections suggests that public recrimination of the election system and the resultant political activity revolve around two central themes. First, it is necessary to make the race for political office as competitive as possible. Second, a political officeholder should not be compromised to a special interest. Limitations on campaign expenditures are at best useless and at worst highly unfair. With respect to the fairness criterion, however, public financing of elections may be ineffective.

The article compares and contrasts referendum and legislative procedures as alternative methods of determining governmental policy. This analysis concluded that the legislative system often favors those issues that yield a clearly-identifiable and substantial benefit to a small group of persons at the expense of the larger group of individuals, each bearing small and difficult to identify costs. This model also illustrates that when a referendum decision role is utilized, the opposite type of bias results. Referendum voting on special interest proposals is biased in favor of the disinterested majority. Therefore, ceteris paribus, when voting is by referendum, special interest proposals are more likely to be defeated than when decisions are made legislatively. In general, one can not say that the legislative decision rule is more efficient than referenda. The legislative rule promotes the adoption of special interest legislation with a benefit/cost ratio of greater than unity, legislation that would likely fail by referendum.

This paper presents an empirical test of the interest group theory of regulation. First, regulation of coal strip mining, an issue consistent with Becker's (1983) theory of political competition, is examined. Second, votes on bills and amendments are used to construct a "strength of control" variable to measure a legislator's intensity of preference on the issue. Third, campaign contributions are used to measure the influence of ideological and other interest groups. Results suggest that mining regulations are shaped by the influence of interest groups, in some cases more strongly than in others. [ABSTRACT FROM AUTHOR]