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In this paper I examine agglomeration effects on the intensity of local knowledge transfers from universities to high technology innovations within the modified Griliches-Jaffe knowledge production function framework. Estimations are carried out at the level of U.S. metropolitan areas. Concentration of high technology employment turns out to be the most important factor promoting local academic knowledge transfers. I find that a "critical mass" of agglomeration must be reached in order to expect substantial local economic effects of academic research spending. Copyright 2000 Blackwell Publishers

Using data for U.S. metropolitan statistical areas, an earlier study of aggregate local geographic research spillovers generated by universities (Anselin et al.1997) was extended to a sectorally disaggregated level. These findings suggest the existence of significant sectoral variation with respect to local university effects on innovation. Apparent differences were found across sectors with respect to the "mix" of applied local knowledge inputs in general, and the extent to which university research plays a role in innovation in particular. The main conclusion is that local university spillovers seem to be specific to certain industries, such that at the two-digit SIC level, no university spillover effects are at work in the Drugs and Chemicals (SIC28) and in the Machinery (SIC35) sectors. On the contrary, very strong and significant university research spillovers are evidenced in the Electronics (SIC36) and the Instruments (SIC38) industries. These spillovers extend beyond the boundary of the MSA within a 75-mile range from the central city. Copyright 2000 Gatton College of Business and Economics, University of Kentucky.