Working Paper: CEPR ID: DP17442
Authors: Francesco Cinnirella; Erik Hornung; Julius Koschnick
Abstract: Economic societies emerged during the late eighteenth-century. We argue that these institutions reduced the costs of accessing useful knowledge by adopting, producing, and diffusing new ideas. Combining location information for the universe of 3,300 members across active economic societies in Germany with those of patent holders and World's Fair exhibitors, we show that regions with more members were more innovative in the late nineteenth-century. This long-lasting effect of societies arguably arose through agglomeration economies and localized knowledge spillovers. To support this claim, we provide evidence suggesting an immediate increase in manufacturing, an earlier establishment of vocational schools, and a higher density of highly skilled mechanical workers by mid-nineteenth century in regions with more members. We also show that regions with members from the same society had higher similarity in patenting, suggesting that social networks facilitated spatial knowledge diffusion and, to some extent, shaped the geography of innovation.
Keywords: Economic societies; Useful knowledge; Knowledge diffusion; Innovation; Social networks
JEL Codes: N33; O33; O31; O43
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| members from the same society (Z13) | higher technological similarity in patents (O38) |
| more society members (D71) | immediate increases in manufacturing (L60) |
| more society members (D71) | higher density of skilled mechanics (L62) |
| higher density of society members (R23) | density of valuable patents granted (O34) |
| doubling the number of society members (D71) | valuable patents (O34) |
| presence of society members (Z13) | earlier establishment of vocational schools (I23) |