Access to public knowledge is a prerequisite for the good functioning of developed economies. Universities strive and are also requested to contribute to this knowledge both locally and internationally. Traditional studies on the geography of knowledge flows have identified a localisation effect; however, these studies do not use the country as the unit of observation and hence do not explore national patterns. In this paper, we hypothesise that the localisation of university knowledge flows is directly related to share of firm expenditure on research and development.