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The agglomeration of R&D labs

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

This paper has been superseded by WP 15-03. 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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Paper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 12-22.

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Length: 45 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:fip:fedpwp:12-22
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  1. Kristy Buzard & Gerald Carlino, 2013. "The geography of research and development activity in the US," Chapters, in: Handbook of Industry Studies and Economic Geography, chapter 16, pages 389-410 Edward Elgar.
  2. J. Vernon Henderson & Mohammad Arzaghi, 2005. "Networking Off Madison Avenue," Working Papers 05-15, Center for Economic Studies, U.S. Census Bureau.
  3. Giuseppe Arbia & Giuseppe Espa & Diego Giuliani & Andrea Mazzitelli, 2009. "Clusters of firms in space and time," Department of Economics Working Papers 0902, Department of Economics, University of Trento, Italia.
  4. Paulo Guimar�es & Octávio Figueiredo & Douglas Woodward, 2007. "Measuring The Localization Of Economic Activity: A Parametric Approach," Journal of Regional Science, Wiley Blackwell, vol. 47(4), pages 753-774.
  5. repec:bla:restud:v:75:y:2008:i:4:p:1011-1038 is not listed on IDEAS
  6. Lychagin, Sergey & Pinkse, Joris & Slade, Margaret E. & Van Reenen, John, 2010. "Spillovers in Space: Does Geography Matter?," CEPR Discussion Papers 7928, C.E.P.R. Discussion Papers.
  7. Duranton, Gilles & Henry G Overman, 2003. "Testing for Localisation Using Micro-Geographic Data," Royal Economic Society Annual Conference 2003 69, Royal Economic Society.
  8. 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.
  9. William R. Kerr & Scott Duke Kominers, 2012. "Agglomerative Forces and Cluster Shapes," Working Papers 12-09, Center for Economic Studies, U.S. Census Bureau.
  10. 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 2005/9, OECD Publishing.
  11. Gerald Carlino & Robert Hunt, 2009. "What explains the quantity and quality of local inventive activity?," Working Papers 09-12, Federal Reserve Bank of Philadelphia.
  12. Yasusada Murata & Ryo Nakajima & Ryosuke Okamoto & Ryuichi Tamura, 2014. "Localized Knowledge Spillovers and Patent Citations: A Distance-Based Approach," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 967-985, December.
  13. William Kerr & Edward Glaeser & Glenn Ellison, 2007. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," Working Papers 07-13, Center for Economic Studies, U.S. Census Bureau.
  14. 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.
  15. Holmes, Thomas J. & Stevens, John J., 2004. "Spatial distribution of economic activities in North America," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 63, pages 2797-2843 Elsevier.
  16. 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.
  17. Giuseppe Arbia & Giuseppe Espa & Danny Quah, 2008. "A class of spatial econometric methods in the empirical analysis of clusters of firms in the space," Empirical Economics, Springer, vol. 34(1), pages 81-103, February.
  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, vol. 81(3), pages 511-515, August.
  19. Hall, B. & Jaffe, A. & Trajtenberg, M., 2001. "The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools," Papers 2001-29, Tel Aviv.
  20. MORI Tomoya & Tony E. SMITH, 2013. "A Probabilistic Modeling Approach to the Detection of Industrial Agglomerations," Discussion papers 13013, Research Institute of Economy, Trade and Industry (RIETI).
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