Conflict and Knowledge Flows: Evidence From the 9/11 Attacks

ABSTRACT We assess how geopolitical conflict affects cross‐border knowledge flows by exploring an unexpected event: the 9/11 attacks. Exploiting cross‐country patent citation, collaboration data from the PATSTAT (1990–2015), patent transaction and grant outcome data from Bureau van Dijk's Orbis (Q1 2001–Q4 2003), we show that the trust ‐erosion shock between ethnic groups significantly reduced knowledge flows between NATO and Muslim‐majority countries, with sharper declines in high‐ trust sectors and patents involving Muslim inventors. Our analysis reveals that trust erosion, rather than conventional economic channels like trade, FDI, or migration serves as the primary mechanism, evidenced by asymmetric knowledge flow patterns, and mitigated effects for Muslim‐majority countries with stronger pre‐existing NATO ties. Our results highlight the enduring impact of geopolitical conflict on knowledge flows, underscoring trust as a critical yet vulnerable component for global knowledge exchange.