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Urban density and the rate of invention

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Gerald Carlino
Satyajit Chatterjee
Robert Hunt

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Abstract

Economists, beginning with Alfred Marshall, have studied the significance of cities in the production and exploitation of information externalities that, today, we call knowledge spillovers. This paper presents robust evidence of those effects. We show that patent intensity—the per capita invention rate—is positively related to the density of employment in the highly urbanized portion of MAs. All else equal, a city with twice the employment density (jobs per square mile) of another city will exhibit a patent intensity (patents per capita) that is 20 percent higher. Patent intensity is maximized at an employment density of about 2,200 jobs per square mile. A city with a more competitive market structure or one that is not too large (a population less than 1 million) will also have a higher patent intensity. These findings confirm the widely held view that the nation’s densest locations play an important role in creating the flow of ideas that generate innovation and growth. ; Supersedes Working Paper No. 04-16

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  1. Edward L. Glaeser & William R. Kerr, 2008. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," NBER Working Papers 14407, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Sherrill Shaffer & Iftekhar Hasan & Mingming Zhou, 2008. "New Small Firms And Dimensions Of Economic Performance," CAMA Working Papers 2008-24, Australian National University, Centre for Applied Macroeconomic Analysis. [Downloadable!]
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  3. Richard Harris & Victoria Kravtsova, 2009. "In Search of W," SERC Discussion Papers 0017, Spatial Economics Research Centre, LSE. [Downloadable!]
  4. Klaus Desmet & Esteban Rossi-Hansberg, 2009. "Spatial Development," NBER Working Papers 15349, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Gerald Carlino & Robert Hunt, 2009. "What explains the quantity and quality of local inventive activity?," Working Papers 09-12, Federal Reserve Bank of Philadelphia. [Downloadable!]
  6. Jaakko Simonen & Philip McCann, 2008. "Innovation, R&D cooperation and labor recruitment: evidence from Finland," Small Business Economics, Springer, vol. 31(2), pages 181-194, August. [Downloadable!] (restricted)
  7. Edward Bergman & Gunther Maier, 2009. "Network central: regional positioning for innovative advantage," The Annals of Regional Science, Springer, vol. 43(3), pages 615-644, September. [Downloadable!] (restricted)
  8. Kevin A. Bryan & Brian D. Minton & Pierre-Daniel G. Sarte, 2007. "The evolution of city population density in the United States," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 341-360. [Downloadable!]
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