Why are Some Regions More Innovative than Others? The Role of Firm Size Diversity

Ajay Agrawal, Iain Cockburn, Alberto Galasso and Alexander Oettl

No 17793, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Large labs may spawn spin-outs caused by innovations deemed unrelated to the firm's overall business. Small labs generate demand for specialized services that lower entry costs for others. We develop a theoretical framework to study the interplay of these two localized externalities and their impact on regional innovation. We examine MSA-level patent data during the period 1975-2000 and find that innovation output is higher where large and small labs coexist. The finding is robust to across-region as well as within-region analysis, IV analysis, and the effect is stronger in certain subsamples consistent with our explanation but not the plausible alternatives.

JEL-codes: O31 R11 (search for similar items in EconPapers)
Date: 2012-01
New Economics Papers: this item is included in nep-bec, nep-cse, nep-geo, nep-ino, nep-sbm and nep-ure
Note: PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.nber.org/papers/w17793.pdf (application/pdf)

Related works:
Working Paper: Why are some regions more innovative than others? The role of firm size diversity (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:17793

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w17793

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().