The impact of geographical and technological proximity on knowledge spillovers from formal standards

Abstract Proximity is traditionally viewed as crucial for overcoming the search and transfer costs associated with imperfectly codified knowledge. But does proximity still matter when formal standard publication jointly enhances the codification, certainty, and accessibility of technical knowledge? Evidence from the U.S. Information and Communication Technology industry shows that technological proximity drives substantial spillover gains, largely irrespective of location. Conversely, geographical proximity confers a compensating advantage when technological proximity is low. We reveal a nuanced interplay of proximity in knowledge spillovers: while formal standardization effectively flattens the world for the technologically proximate, co-location remains vital for their less proximate counterparts.