SCAPE Working Paper Series, Paper No. 2008/02 - March 2008
East Asia is emerging as a hub of technological innovation. This paper investigates the extent to which East Asia has become a source of international knowledge diffusion and whether such diffusion is localized to the region. Using citations made by U.S. Patent and Trademark Office (USPTO) granted patents to other USPTO patents as an indicator of knowledge flow and estimating a model of international knowledge diffusion, I find strong evidence corroborating the hypothesis of increasing regionalization of knowledge flow in East Asia. Korea and Taiwan, the region's leading innovators, cite each other at least as frequently as they cite the US and Japan. Such knowledge flow has substantially intensified since the mid 1990s. With the exception of Thailand, all of the East Asian economies that I examine, Hong Kong, Singapore, China, and Malaysia, cite Korea and Taiwan at least as frequently as they cite the US and Japan. The "G5" group, which includes Britain, Canada, France, Germany and Italy, has been the least often cited source of knowledge for East Asia.