Working Paper: NBER ID: w20367
Authors: Gerald Carlino; William R. Kerr
Abstract: This chapter reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then describe how these factors are frequently measured in the data and some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).
Keywords: agglomeration; innovation; economic performance; knowledge spillovers
JEL Codes: J2; J6; L1; L2; L6; O3; O4; R1; R3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Agglomeration (R11) | Innovation (O35) |
| Agglomeration (R11) | Economic Performance (P17) |
| Agglomeration (R11) | Knowledge Spillovers (O36) |
| Knowledge Spillovers (O36) | Innovation (O35) |
| Agglomeration (R11) | R&D Concentration (O32) |
| R&D Concentration (O32) | Innovation (O35) |