Spatial sorting of innovative firms and heterogeneous effects of agglomeration on innovation in Germany

Annekatrin Niebuhr, Jan Cornelius Peters and Alex Schmidke

VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy from Verein für Socialpolitik / German Economic Association

Abstract: We examine the effects of urbanization and localization on four distinct types of innovation in manufacturing and services. Furthermore, estimating multilevel panel regression models, we investigate the sorting of highly innovative firms into dense urban regions by considering both observable and unobservable firm characteristics. The results indicate that spatial sorting is important. A large portion of the regional differences in firm innovation rates is due to firm characteristics. Estimates that ignore unobserved heterogeneity at the firm level still point to a positive and significant impact of localization on different types of innovation. However, once we include firm fixed effects and distinguish between manufacturing and services, only some weak indication for positive effects of localization on radical innovations of manufacturing firms remains. In addition, the rate to adopt an existing product by an manufacturing firm is positively related to the regional employment density. For the service sector, in contrast, we find adverse effects of localization on different kinds of innovation and no important effect of urbanization.

Keywords: Agglomeration economies; firm innovation; localization; urbanization (search for similar items in EconPapers)
JEL-codes: D22 O31 R12 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-com, nep-ent, nep-eur, nep-geo, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/203584/1/VfS-2019-pid-27751.pdf (application/pdf)

Related works:
Journal Article: Spatial sorting of innovative firms and heterogeneous effects of agglomeration on innovation in Germany (2020)
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:zbw:vfsc19:203584

Access Statistics for this paper

More papers in VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy from Verein für Socialpolitik / German Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().