Working Paper: CEPR ID: DP11067
Authors: Rune Dahl Fitjar; Andrés Rodríguez-Pose
Abstract: It has often been argued that ?there is something in the air? which makes firms in high-density environments ? such as cities or clusters ? more innovative. The co-location of firms facilitates the emergence of serendipity and casual encounters which promote innovation in firms. We assess this hypothesis using data from a survey of Norwegian firms engaged in innovation partnerships. The results indicate that there may be ?much less in the air? than is generally assumed in the literature. The relationships conducive to innovation by Norwegian firms emerged as a consequence of purpose-built searches and had little to do with chance, serendipity, or ?being there?.
Keywords: agglomeration; externalities; firms; innovation; Norway; spillovers; tacit knowledge
JEL Codes: O31; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Purposebuilt partnerships (L14) | higher levels of innovation (O35) |
| Casual encounters (J46) | limited impact on innovation (O36) |
| Purposebuilt partnerships (L14) | significantly associated with innovation outcomes (O36) |
| Casual partnerships (J12) | no significant increase in innovation levels (O39) |