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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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    References listed on IDEAS

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    Cited by:

    1. 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).
    2. 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.
    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. Christophe CARRINCAZEAUX (GREThA, CNRS, UMR 5113) & Frédéric GASCHET (GREThA, CNRS, UMR 5113), 2012. "Knowledge and diversity of innovation systems: a comparative analysis of European regions," Cahiers du GREThA 2012-06, Groupe de Recherche en Economie Théorique et Appliquée.
    5. 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.
    6. Carolina Pasciaroni, 2013. "Ciudades de tamaño medio e innovacion: Una aproximacion sistemica," DOCUMENTOS DE TRABAJO 011078, UNIVERSIDAD TECNOLÓGICA DE BOLÍVAR.
    7. 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].
    8. Edward L. Glaeser & Albert Saiz, 2003. "The rise of the skilled city," Working Papers 04-2, Federal Reserve Bank of Philadelphia.
    9. 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.
    10. Satyajit Chatterjee, 2003. "Agglomeration economies: the spark that ignites a city?," Business Review, Federal Reserve Bank of Philadelphia, issue Q4, pages 6-13.
    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. 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.
    13. 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.
    14. World Bank Group, 2017. "Special Economic Zones," World Bank Other Operational Studies 29054, The World Bank.
    15. 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.
    16. Claude LACOUR (GREThA) & Sylvette PUISSANT (GREThA), 2008. "Medium-Sized Cities and the Dynamics of Creative Services," Cahiers du GREThA 2008-08, Groupe de Recherche en Economie Théorique et Appliquée.

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    Keywords

    Patents ; Urban economics;

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