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The Returns to Face-to-Face Interactions: Knowledge Spillovers in Silicon Valley

Author

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  • Atkin, David
  • Chen, Keith
  • Popov, Anton

Abstract

The returns to face-to-face interactions are of central importance to understanding the determinants of agglomeration. However, the existing literature studying patterns of geographic proximity in patent citations or industrial co-location has struggled to disentangle the benefits of face-to-face interactions from other spatial spillovers. In this paper, we use highly granular smartphone geolocation data to measure face-to-face interactions (or meetings) between workers at different establishments in Silicon Valley. To study the degree to which knowledge flows result from such interactions, we explore the relationship between these meetings and the citations among the firms these workers belong to. As firms may organize meetings with those they wish to learn from, we isolate causal impacts of face-to-face meetings by instrumenting with the meetings between workers in adjacent firms that belong to unconnected industries. Our IV approach estimates substantial returns to face-to-face meetings with overidentification tests suggesting we are capturing the returns to serendipity that play a central role in the urban theories of Jane Jacobs.

Suggested Citation

  • Atkin, David & Chen, Keith & Popov, Anton, 2022. "The Returns to Face-to-Face Interactions: Knowledge Spillovers in Silicon Valley," CEPR Discussion Papers 17377, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:17377
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    Cited by:

    1. Biermann, Marcus, 2024. "Remote talks: Changes to economics seminars during COVID-19," European Economic Review, Elsevier, vol. 163(C).
    2. Yuhei Miyauchi & Kentaro Nakajima & Stephen J. Redding, 2021. "The Economics of Spatial Mobility: Theory and Evidence Using Smartphone Data," NBER Working Papers 28497, National Bureau of Economic Research, Inc.
    3. Moritz Goldbeck, 2023. "Bit by Bit: Colocation and the Death of Distance in Software Developer Networks," Rationality and Competition Discussion Paper Series 422, CRC TRR 190 Rationality and Competition.
    4. MORIKAWA Masayuki, 2022. "Productivity Dynamics of Work from Home since the Onset of the COVID-19 Pandemic: Evidence from a panel of firm surveys," Discussion papers 22061, Research Institute of Economy, Trade and Industry (RIETI).
    5. Kox, Henk L.M., 2022. "Linking the knowledge-capital model of foreign direct investment with national knowledge systems," EconStor Preprints 266495, ZBW - Leibniz Information Centre for Economics.
    6. Eugenia Go & Kentaro Nakajima & Yasuyuki Sawada & Kiyoshi Taniguchi, 2023. "Satellite-Based Vehicle Flow Data to Assess Local Economic Activities," CIRJE F-Series CIRJE-F-1209, CIRJE, Faculty of Economics, University of Tokyo.
    7. Kox, Henk L.M., 2022. "Testing the knowledge-capital model of foreign direct investment: New evidence," MPRA Paper 114177, University Library of Munich, Germany.
    8. Kox, Henk L.M., 2022. "Revisiting the knowledge-capital model of foreign direct investment: New multi-country evidence," MPRA Paper 114559, University Library of Munich, Germany, revised 14 Sep 2022.
    9. Moritz Goldbeck, 2022. "Bit by Bit - Colocation and the Death of Distance in Software Developer Networks," ifo Working Paper Series 386, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    10. Lena Abou El-Komboz & Moritz Goldbeck, 2024. "Virtually Borderless? Cultural Proximity and International Collaboration of Developers," ifo Working Paper Series 407, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    11. Stijn Van Nieuwerburgh, 2023. "The remote work revolution: Impact on real estate values and the urban environment: 2023 AREUEA Presidential Address," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 51(1), pages 7-48, January.
    12. Pierre Magontier, Maximilian v. Ehrlich, Markus Schl pfer, 2022. "The Fragility of Urban Social Networks - Mobility as a City Glue -," Diskussionsschriften credresearchpaper38, Universitaet Bern, Departement Volkswirtschaft - CRED.
    13. Berliant, Marcus & Fujita, Masahisa, 2024. "Knowledge creation through multimodal communication," MPRA Paper 120845, University Library of Munich, Germany.
    14. Kox, Henk L.M., 2023. "Testing an extended knowledge-capital model of foreign direct investment," MPRA Paper 117266, University Library of Munich, Germany.
    15. Lena Abou El-Komboz & Thomas Fackler, 2023. "Productivity Spillovers among Knowledge Workers in Agglomerations: Evidence from GitHub," Rationality and Competition Discussion Paper Series 399, CRC TRR 190 Rationality and Competition.
    16. Wei, Xiahai & Wei, Qingfang & Yang, Lisha, 2023. "Induced green innovation of suppliers: The “green power” from major customers," Energy Economics, Elsevier, vol. 124(C).

    More about this item

    Keywords

    Knowledge spillovers; Face-to-face interactions; Serendipity; Estimation of agglomeration economies;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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