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Local Booms and Innovation

Author

Listed:
  • Coelli, Federica

    (Dept. of Economics, University of Zurich)

  • Pelzl, Paul

    (Dept. of Business and Management Science, Norwegian School of Economics)

Abstract

Using oil and gas shocks as an exogenous source of business cycles at the U.S. commuting zone level, we provide novel evidence that local booms increase local patenting, especially in non-metropolitan areas. This reflects agglomeration economies that make incumbent inventors more productive. In contrast to total patenting, innovation in oil and gas – the sector closest to the boom – is countercyclical, consistent with higher opportunity costs of innovation in a booming industry. Our findings shed new light on the spatial dimension of innovation, inform recent debates on place-based industrial policy, and help to reconcile mixed evidence on the cyclicality of innovation.

Suggested Citation

  • Coelli, Federica & Pelzl, Paul, 2025. "Local Booms and Innovation," Discussion Papers 2025/20, Norwegian School of Economics, Department of Business and Management Science.
    • Handle: RePEc:hhs:nhhfms:2025_020
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    File URL: https://hdl.handle.net/11250/3197720
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    More about this item

    Keywords

    Innovation; patents; local economic booms; agglomeration; natural resources;
    All these keywords.

    JEL classification:

    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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