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The agglomeration of R&D labs

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  • Gerald A. Carlino
  • Robert M. Hunt
  • Jake K. Carr
  • Tony E. Smith

Abstract

We study the location of more than 1,000 research and development (R&D) labs located in the Northeast corridor of the U.S. Using a variety of spatial econometric techniques, we find that these labs are substantially more concentrated in space than the underlying distribution of manufacturing activity. Ripley’s K-function tests over a variety of spatial scales reveal that the strongest evidence of concentration occurs at two discrete distances: one at about one-quarter of a mile and another at about 40 miles. We also find that R&D labs in some industries (e.g., chemicals, including drugs) are substantially more spatially concentrated than are R&D labs as a whole. ; Tests using local K-functions reveal several concentrations of R&D labs that appear to represent research clusters. We verify this conjecture using significance maximizing techniques (e.g., SATSCAN) that also address econometric issues related to “multiple testing” and spatial autocorrelation. ; We develop a new procedure for identifying clusters – the multiscale core-cluster approach, to identify labs that appear to be clustered at a variety of spatial scales. Locations in these clusters are often related to basic infrastructure such as access to major roads. There is significant variation in the industrial composition of labs across these clusters. ; The clusters we identify appear related to knowledge spillovers: Citations to patents previously obtained by inventors residing in clustered areas are significantly more localized than one would predict from a (control) sample of otherwise similar patents. ; This paper supersedes Working Papers 10-33 and 11-42.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 12-22.

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Date of creation: 2012
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Handle: RePEc:fip:fedpwp:12-22

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Keywords: Research and development;

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References

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  1. J. Vernon Henderson & Mohammad Arzaghi, 2005. "Networking Off Madison Avenue," Working Papers, Center for Economic Studies, U.S. Census Bureau 05-15, Center for Economic Studies, U.S. Census Bureau.
  2. Gilles Duranton & Henry Overman, 2002. "Testing for Localisation Using Micro-Geographic Data," CEP Discussion Papers, Centre for Economic Performance, LSE dp0540, Centre for Economic Performance, LSE.
  3. William Kerr & Edward Glaeser & Glenn Ellison, 2007. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," Working Papers, Center for Economic Studies, U.S. Census Bureau 07-13, Center for Economic Studies, U.S. Census Bureau.
  4. Sergey Lychagin & Joris Pinkse & Margaret E. Slade & John Van Reenen, 2010. "Spillovers in Space: Does Geography Matter?," NBER Working Papers 16188, National Bureau of Economic Research, Inc.
  5. Agrawal, Ajay & Kapur, Devesh & McHale, John, 2008. "How do spatial and social proximity influence knowledge flows? Evidence from patent data," Journal of Urban Economics, Elsevier, vol. 64(2), pages 258-269, September.
  6. Fu, Shihe, 2007. "Smart Cafe Cities: Testing human capital externalities in the Boston metropolitan area," Journal of Urban Economics, Elsevier, vol. 61(1), pages 86-111, January.
  7. Colin Webb & Hélène Dernis & Dietmar Harhoff & Karin Hoisl, 2005. "Analysing European and International Patent Citations: A Set of EPO Patent Database Building Blocks," OECD Science, Technology and Industry Working Papers, OECD Publishing 2005/9, OECD Publishing.
  8. Giuseppe Arbia & Giuseppe Espa & Danny Quah, 2007. "A class of spatial econometric methods in the empirical analysis of clusters of firms in the space," Department of Economics Working Papers, Department of Economics, University of Trento, Italia 0705, Department of Economics, University of Trento, Italia.
  9. Hall, Bronwyn H & Jaffe, Adam B & Trajtenberg, Manuel, 2001. "The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3094, C.E.P.R. Discussion Papers.
  10. Yasusada Murata & Ryo Nakajima & Ryosuke Okamoto & Ryuichi Tamura, 2011. "Localized knowledge spillovers and patent citations: A distance-based approach," KIER Working Papers, Kyoto University, Institute of Economic Research 763, Kyoto University, Institute of Economic Research.
  11. Carlino, Gerald A. & Chatterjee, Satyajit & Hunt, Robert M., 2007. "Urban density and the rate of invention," Journal of Urban Economics, Elsevier, vol. 61(3), pages 389-419, May.
  12. MORI Tomoya & Tony E. SMITH, 2013. "A Probabilistic Modeling Approach to the Detection of Industrial Agglomerations," Discussion papers, Research Institute of Economy, Trade and Industry (RIETI) 13013, Research Institute of Economy, Trade and Industry (RIETI).
  13. Giuseppe Arbia & Giuseppe Espa & Diego Giuliani & Andrea Mazzitelli, 2009. "Clusters of firms in space and time," Department of Economics Working Papers, Department of Economics, University of Trento, Italia 0902, Department of Economics, University of Trento, Italia.
  14. William R. Kerr & Scott Duke Kominers, 2010. "Agglomerative Forces and Cluster Shapes," Harvard Business School Working Papers, Harvard Business School 11-061, Harvard Business School, revised Nov 2012.
  15. Kristy Buzard & Gerald Carlino, 2009. "The geography of research and development activity in the U.S," Working Papers, Federal Reserve Bank of Philadelphia 09-16, Federal Reserve Bank of Philadelphia.
  16. Gerald Carlino & Robert Hunt, 2009. "What explains the quantity and quality of local inventive activity?," Working Papers, Federal Reserve Bank of Philadelphia 09-12, Federal Reserve Bank of Philadelphia.
  17. Paulo Guimar�es & Octávio Figueiredo & Douglas Woodward, 2007. "Measuring The Localization Of Economic Activity: A Parametric Approach," Journal of Regional Science, Wiley Blackwell, Wiley Blackwell, vol. 47(4), pages 753-774.
  18. Dietmar Harhoff & Francis Narin & F. M. Scherer & Katrin Vopel, 1999. "Citation Frequency And The Value Of Patented Inventions," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 81(3), pages 511-515, August.
  19. Holmes, Thomas J. & Stevens, John J., 2004. "Spatial distribution of economic activities in North America," Handbook of Regional and Urban Economics, Elsevier, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 63, pages 2797-2843 Elsevier.
  20. repec:bla:restud:v:75:y:2008:i:4:p:1011-1038 is not listed on IDEAS
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Cited by:
  1. David Neumark & Helen Simpson, 2014. "Place-Based Policies," NBER Working Papers 20049, National Bureau of Economic Research, Inc.
  2. Franz-Josef Bade & Eckhardt Bode & Eleonora Cutrini, 2012. "Spatial fragmentation of industries by functions," Working Papers, Macerata University, Department of Studies on Economic Development (DiSSE) 39-2012, Macerata University, Department of Studies on Economic Development (DiSSE), revised Feb 2012.

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