Geographic scope of proximity effects among small life sciences firms

Christos Kolympiris, Nicholas Kalaitzandonakes

Research output: Contribution to journalArticlepeer-review

23 Citations (SciVal)


A large number of studies have demonstrated that proximity effects from knowledge spillovers, network externalities and other forms of knowledge transfers among like firms are geographically bounded. However, only a few studies have measured the strength and geographic scope of such externalities and even fewer have done so for firms in very close proximity. In this study, we examine the size and geographic scope of proximity effects among all life science firms that have received Small Business Innovation Research (SBIR) grants in the US over a 23-year period while controlling for relevant regional and firm characteristics. From our empirical analysis, we conclude that proximity effects among nearby small life science firms are strong within one-tenth of a mile distance and are exhausted within a radius of 1. 5 miles. By examining the location of all firms in the sample, we offer possible explanations for the narrow geographic scope of the measured proximity effects. We also explain the significance of such findings for academic research that seeks to understand the nature of spatial externalities and for public policy.

Original languageEnglish
Pages (from-to)1059-1086
Number of pages28
JournalSmall Business Economics
Issue number4
Publication statusPublished - 1 Jan 2013


  • Geographic scope
  • Knowledge spillovers
  • Life sciences
  • Proximity effects
  • SBIR
  • Spatial externalities

ASJC Scopus subject areas

  • Economics and Econometrics
  • Business, Management and Accounting(all)


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