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Spatial sorting of innovative firms and heterogeneous effects of agglomeration on innovation in Germany

Author

Listed:
  • Annekatrin Niebuhr

    (Institute for Employment Research
    Christian-Albrechts-Universität zu Kiel)

  • Jan Cornelius Peters

    (Institute for Employment Research
    Johann Heinrich von Thünen Institute)

  • Alex Schmidke

    (Institute for Employment Research)

Abstract

We examine the effects of agglomeration, differentiating between urbanization and localization economies, on four distinct types of innovation in manufacturing and services. Furthermore, estimating multilevel panel regression models, we investigate the sorting of highly innovative firms into dense urban and/or specialized regions by considering both observable and unobservable firm characteristics. The results indicate that spatial sorting is important. A large portion of the regional differences in firm innovation rates is due to firm characteristics. Estimates that ignore unobserved heterogeneity at the firm level still point to a positive and significant impact of localization economies on different types of innovation. However, once we include firm fixed effects and distinguish between manufacturing and services, only some weak indication for positive effects of localization on radical innovations of manufacturing firms remains. In addition, the probability to adopt an existing product by an manufacturing firm seems to be positively influenced by urbanization economies. For the service sector, in contrast, we find adverse effects of localization on different kinds of innovation and no important effect of urbanization.

Suggested Citation

  • Annekatrin Niebuhr & Jan Cornelius Peters & Alex Schmidke, 2020. "Spatial sorting of innovative firms and heterogeneous effects of agglomeration on innovation in Germany," The Journal of Technology Transfer, Springer, vol. 45(5), pages 1343-1375, October.
    • Handle: RePEc:kap:jtecht:v:45:y:2020:i:5:d:10.1007_s10961-019-09755-8
    DOI: 10.1007/s10961-019-09755-8
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    4. Tobias Schlegel & Curdin Pfister & Dietmar Harhoff & Uschi Backes-Gellner, 2022. "Innovation effects of universities of applied sciences: an assessment of regional heterogeneity," The Journal of Technology Transfer, Springer, vol. 47(1), pages 63-118, February.
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    6. Wang, Xuliang & Xu, Lulu & Ye, Qin & He, Shi & Liu, Yi, 2022. "How does services agglomeration affect the energy efficiency of the service sector? Evidence from China," Energy Economics, Elsevier, vol. 112(C).
    7. Tao Xia & Elias G. Carayannis & Stavros Sindakis & Saloome Showkat & Nikos Kanellos, 2024. "Technology transfer for sustainable rural development: evidence from homestead withdrawal with compensation in Chengdu–Chongqing," The Journal of Technology Transfer, Springer, vol. 49(1), pages 303-333, February.

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    More about this item

    Keywords

    Agglomeration economies; Spatial sorting; Firm innovation; Localization; Urbanization;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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