Economic geography of innovation in India: an empirical investigation

Aasheerwad Dwivedi and Aakanksha Arora

Innovation and Development, 2020, vol. 10, issue 3, 395-412

Abstract: Theory points toward geographical clustering of economic activity as an important determinant of innovation. A stylized fact about the Indian economy is the geographic concentration of both economic activity and innovation. The paper first analyses the spatial pattern of patent applications across Indian districts. Considering innovation to be a complex and collaborative process, this paper investigates the relevance of economic geography for innovation for all Indian districts. We estimate agglomeration economies by creating Herfindahl index, localization index and Access index for all districts. Using the count data model, we estimate the effect of agglomeration economies, knowledge spillovers along with other variables including R&D expenditure, human capital, institution and infrastructure in creating innovation. The results show a strong and statistically significant effect of the agglomeration variables on innovative activity in a district. R&D expenditures in own district and neighbouring districts also have a positive relationship with the number of patent applications. Moreover, institutions, infrastructure and local socio-economic conditions do matter for innovative activity.

Date: 2020
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DOI: 10.1080/2157930X.2019.1679952

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