Not Invented Here? Innovation in Company Towns

Ajay Agrawal, Iain Cockburn and Carlos Rosell

No 15437, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine variation in the concentration of inventive activity across 72 of North America's most highly innovative locations. In 12 of these areas, innovation is particularly concentrated in a single, large firm; we refer to such locations as "company towns.'' We find that inventors employed by large firms in these locations tend to draw disproportionately from their firm's own prior inventions (as measured by citations to their own prior patents) relative to what would be expected given the underlying distribution of innovative activity across all inventing firms in a particular technology field. Furthermore, we find such inventors are more likely to build upon the same prior inventions year after year. However, smaller firms in company towns do not exhibit this myopic behavior; they draw upon prior inventions as broadly as their small-firm counterparts in more diverse locations. In addition, we find that inventions by large firms in company towns have less impact than those produced elsewhere, although the difference is modest, and that the impact is disproportionately appropriated by the inventing firms themselves. Finally, the geographic scope of impact realized by company town inventions is narrower, whether produced by large or small firms.

JEL-codes: O18 O33 R11 (search for similar items in EconPapers)
Date: 2009-10
New Economics Papers: this item is included in nep-ent, nep-ino and nep-ure
Note: PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published as Agrawal, Ajay & Cockburn, Iain & Rosell, Carlos, 2010. "Not Invented Here? Innovation in company towns," Journal of Urban Economics, Elsevier, vol. 67(1), pages 78-89, January.
Published as Ajay Agrawal & Iain Cockburn & Carlos Rosell, 2010. "Not Invented Here? Innovation in Company Towns," NBER Chapters, in: Cities and Entrepreneurship National Bureau of Economic Research, Inc.

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