How Well Do Patent Citations Measure Flows of Technology? Evidence from French Innovation Surveys

Patent citation data are used in a growing body of economics and business research on technological diffusion. Research in this area uses “backward” citations to measure technological knowledge acquired by the patenting entities studied. “Forward” citations (citations to the firm’s patents made by other patents) have been interpreted as a measure of the knowledge diffusing outward from the patenting entity. Until now, there exists little evidence on whether or not patent citations are a good measure of knowledge flows. Our paper assesses the legitimacy of using European patent citations as a measure of technology flows. It uses information from the Community Innovation Survey (CIS) collected by the French Service des Statistiques Industrielles (SESSI), which contain firms’ responses to questions about their innovative activity. We show that patent citations are indeed related to firms’ statements about their acquisition and dispersion of new technology, but that the strength and statistical significance of this relationship varies across geographical regions and across channels of knowledge diffusion.