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Knowledge spillovers and the new economy of cities

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  • Gerald A. Carlino
  • Satyajit Chatterjee
  • Robert M. Hunt

Abstract

Despite much theorizing about the role of geographic concentration of employment in knowledge spillovers, local densities' role in promoting innovations has largely been unexamined. More often, studies have considered the effects of city size variables on innovative activity, although the role of scale was not the main focus of these studies. This paper considers the role of knowledge spillovers on innovations at the MSA level. The authors use patents per capita in an MSA as our measure of innovations in that MSA. They find that the rate of patenting is positively related to the employment density of the highly urbanized portion of an MSA (its urbanized area). Specifically, the authors find, on average, that rate of patenting is 20 percent to 30 percent greater in an MSA with a local economy that is twice as dense as the local economy of another MSA. Since local employment density doubles more than four times in the sample, the implied gains in patents per capita due to urban density are substantial. Thus, these findings confirm the widely held view that the nation?s densest locations play an important role in creating the flow of ideas that generates innovation and growth.

Suggested Citation

  • Gerald A. Carlino & Satyajit Chatterjee & Robert M. Hunt, 2001. "Knowledge spillovers and the new economy of cities," Working Papers 01-14, Federal Reserve Bank of Philadelphia.
  • Handle: RePEc:fip:fedpwp:01-14
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    Cited by:

    1. Geissinger, Andrea & Laurell, Christofer & Sandström, Christian & Eriksson, Klas & Nykvist, Rasmus, 2019. "Digital entrepreneurship and field conditions for institutional change– Investigating the enabling role of cities," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 877-886.
    2. Mascarini, Suelene & Garcia , Renato & Roselino , José Eduardo, 2019. "Analysis of the effect of territorial factors on regional innovation in the state of São Paulo, Brazil," Revista Brasileira de Estudos Regionais e Urbanos, Associação Brasileira de Estudos Regionais e Urbanos (ABER), vol. 13(2), pages 183-200, October.
    3. Andrés Rodríguez-Pose & Riccardo Crescenzi, 2008. "Mountains in a flat world: why proximity still matters for the location of economic activity," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 1(3), pages 371-388.
    4. Mwanda Phiri & Shimukunku Manchishi, 2020. "Special economic zones in Southern Africa: white elephants or latent drivers of growth and employment?: The case of Zambia and South Africa," WIDER Working Paper Series wp-2020-160, World Institute for Development Economic Research (UNU-WIDER).
    5. Carolina Pasciaroni, 2013. "Ciudades de tamano medio e innovación: Una aproximación sistémica," Revista Economía y Región, Universidad Tecnológica de Bolívar, vol. 7(1), pages 101-124, June.
    6. Guido Cozzi & Silvia Galli, 2014. "Sequential R&D and blocking patents in the dynamics of growth," Journal of Economic Growth, Springer, vol. 19(2), pages 183-219, June.
    7. Carolina Pasciaroni, 2013. "Ciudades de tamano medio e innovacion: Una aproximacion sistemica," Documentos de Trabajo 11078, Universidad Tecnológica de Bolívar.
    8. Edward Ludwig Glaeser & Albert Saiz, 2003. "The rise of the skilled city," Working Papers 04-2, Federal Reserve Bank of Philadelphia.
    9. 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.
    10. Eduardo Goncalves & Eduardo Almeida, 2009. "Innovation and Spatial Knowledge Spillovers: Evidence from Brazilian Patent Data," Regional Studies, Taylor & Francis Journals, vol. 43(4), pages 513-528.
    11. M. Bellinzas, 2004. "Dinamiche demografiche, agglomerazione e determinanti economiche. Il caso italiano," Working Paper CRENoS 200407, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    12. Lobo, José & Strumsky, Deborah, 2008. "Metropolitan patenting, inventor agglomeration and social networks: A tale of two effects," Journal of Urban Economics, Elsevier, vol. 63(3), pages 871-884, May.
    13. Christophe CARRINCAZEAUX (E3I-IFReDE-GRES) & Frédéric GASCHET (IERSO-IFReDE-GRES), 2006. "Knowledge and the diversity of innovation systems: a comparative analysis of European regions," Cahiers du GRES (2002-2009) 2006-29, Groupement de Recherches Economiques et Sociales.
    14. Erica L. Groshen & Simon M. Potter & Rebecca J. Sela, 2004. "Economic restructuring in New York State," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 10(Jun).
    15. Elham Erfanian & Amir B. Ferreira Neto, 2017. "Scientific output: labor or capital intensive? An analysis for selected countries," Scientometrics, Springer;Akadémiai Kiadó, vol. 112(1), pages 461-482, July.
    16. Tareef Husain, 2019. "Small and Medium Enterprises Export by Indian Regions: Uncovering the Role of Spatial Factors," Review of Market Integration, India Development Foundation, vol. 11(1-2), pages 7-29, April.
    17. Suelene Mascarini & Renato Garcia & Francesco Quatraro, 2018. "Territorial Aspects Of The Degree Of Novelty Of The Innovation In Brazil," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 170, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    18. Guido Cozzi & Silvia Galli, 2009. "Upstream Innovation Protection: Common Law Evolution and the Dynamics of Wage Inequality," Working Papers 2009_20, Business School - Economics, University of Glasgow.
    19. Satyajit Chatterjee, 2003. "Agglomeration economies: the spark that ignites a city?," Business Review, Federal Reserve Bank of Philadelphia, issue Q4, pages 6-13.
    20. World Bank Group, 2017. "Special Economic Zones," World Bank Publications - Reports 29054, The World Bank Group.
    21. Claude LACOUR & Sylvette PUISSANT, 2008. "Medium-Sized Cities and the Dynamics of Creative Services," Cahiers du GREThA (2007-2019) 2008-08, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    22. Elham Erfanian & Amir B. Ferreira Neto, 2017. "Scientific output: labor or capital intensive? An analysis for selected countries," Scientometrics, Springer;Akadémiai Kiadó, vol. 112(1), pages 461-482, July.
    23. Gupta, Amit Kumar, 2021. "Innovation dimensions and firm performance synergy in the emerging market: A perspective from Dynamic Capability Theory & Signaling Theory," Technology in Society, Elsevier, vol. 64(C).

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