Identifying the driving forces of rural economic growth: the impact of intellectual spillovers, technology, and amenities on employment growth in the US Midwest

This dissertation examines a number of issues related to economic growth in rural regions. The major themes explored are the roles of spatial technological externalities in the creation of new knowledge, the impacts of technology and technology spillovers on non-farm employment growth, and the role of amenities influencing non-farm employment growth. The theoretical model examines the interaction between rural and urban areas in an overlapping generations model allowing migration of high skill workers. The major theoretical conclusions reached suggests: (1) if technology spillovers exist in the urban market then high skill individuals will seek employment in the urban area where they earn an income superior to that in the rural area; and (2) the usefulness of rural amenities as a means to attract individuals is not unambiguous since the trade-off between higher urban wages and rural amenities will depend to a large extent on what type of equilibrium, i.e. high vs. low steady state equilibrium, the economy is in currently. In the empirical applications spatial econometric methods are employed to control for and examine the effect of economic activity in surrounding counties. In chapter two are identified the variables which have significant impacts on new knowledge and technology creation as measured by patents and finds impressive evidence of spatial knowledge spillins. That is, the patenting behavior in close, neighboring proximity tends to have a positive impact on patenting activity in the home county. Chapter three examines the role of local technology and knowledge creation embodied in patents on employment growth in the US Midwest over the period 1969--2000. The results from the empirical analysis overwhelmingly suggest that when patent counts within the county are used as an indicator for new knowledge and technology, then this variable has a strong positive impact on non-farm employment growth within the county. The final chapter exploits the tradeoff relationship between wages and non-monetary amenity benefits. The research indicates amenities in the home county as well as amenities in surrounding counties have an important influence on non-farm employment growth.