Rethinking the regional knowledge production function

The knowledge production function is a questionable device foridentifying the determinants of commercial patenting. Adaptedfrom firm level analysis, it implicitly assumes that some mechanismexists to transfer research and development inputs across institutionsto maximize invention output. Augmenting the approach with regionalstructure variables risks confounding causes and effects, becausethese conditions determine research and development in the firstplace. We contrast a knowledge production function and a regionalstructure model to identify the determinants of commercial patentingin US states in the period 2002–2004. Results show thathuman capital, specialized knowledge flows, urbanization andindustry dominance in technical advance drive commercial patenting.