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Not Invented Here? Innovation in company towns

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  • Agrawal, Ajay
  • Cockburn, Iain
  • Rosell, Carlos

Abstract

We examine variation in the concentration of inventive activity across 72 of North America's most highly innovative locations. In 12 of these areas, innovation is particularly concentrated in a single, large firm; we refer to such locations as "company towns". We find that inventors employed by large firms in these locations tend to draw disproportionately from their firm's own prior inventions (as measured by citations to their own prior patents) relative to what would be expected given the underlying distribution of innovative activity across all inventing firms in a particular technology field. Furthermore, we find such inventors are more likely to build upon the same prior inventions year after year. However, smaller firms in company towns do not exhibit this myopic behavior; they draw upon prior inventions as broadly as their small-firm counterparts in more diverse locations. In addition, we find that inventions by large firms in company towns have less impact than those produced elsewhere, although the difference is modest, and that the impact is disproportionately appropriated by the inventing firms themselves. Finally, the geographic scope of impact realized by company town inventions is narrower, whether produced by large or small firms.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 67 (2010)
Issue (Month): 1 (January)
Pages: 78-89

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Handle: RePEc:eee:juecon:v:67:y:2010:i:1:p:78-89

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Web page: http://www.elsevier.com/locate/inca/622905

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Keywords: Knowledge flows Agglomeration Recombination Innovation Entrepreneurship;

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Citations

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Cited by:
  1. Kerr, William R., 2010. "Breakthrough inventions and migrating clusters of innovation," Journal of Urban Economics, Elsevier, vol. 67(1), pages 46-60, January.
  2. Yasusada Murata & Ryo Nakajima & Ryosuke Okamoto & Ryuichi Tamura, 2011. "Localized knowledge spillovers and patent citations: A distance-based approach," KIER Working Papers 763, Kyoto University, Institute of Economic Research.
  3. Aurélie LALANNE (GREThA, CNRS, UMR 5113) & Guillaume POUYANNE ( GREThA, CNRS, UMR 5113), 2012. "Ten years of metropolization in economics: a bibliometric approach (In French)," Cahiers du GREThA 2012-11, Groupe de Recherche en Economie Théorique et Appliquée.
  4. Ufuk Akcigit & William R. Kerr, 2010. "Growth Through Heterogeneous Innovations," NBER Working Papers 16443, National Bureau of Economic Research, Inc.
  5. Jofre-Monseny, Jordi & Marín-López, Raquel & Viladecans-Marsal, Elisabet, 2011. "The mechanisms of agglomeration: Evidence from the effect of inter-industry relations on the location of new firms," Journal of Urban Economics, Elsevier, vol. 70(2-3), pages 61-74, September.
  6. Yasusada Murata & Ryo Nakajima & Ryosuke Okamoto & Ryuichi Tamura, 2013. "Localized knowledge spillovers and patent citations: A distance-based approach (revised version)," GRIPS Discussion Papers 12-18, National Graduate Institute for Policy Studies.

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