Working Paper

Agglomeration and innovation

Abstract: Draft chapter for the forthcoming Handbook of Regional and Urban Economics, Vols. 5A and 5B This paper reviews academic research on the connections between agglomeration and innovation. The authors first describe the conceptual distinctions between invention and innovation. They then discuss how these factors are frequently measured in the data and note some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and the authors discuss important findings from the literature about why this is so. The authors highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and they discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).

Keywords: Agglomeration; Clusters; Innovation; Invention; Entrepreneurship;

JEL Classification: J2; J6; L1; L2; L6; O3; R1; R3;

Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Working Papers

Publication Date: 2014-08-01

Number: 14-26

Pages: 62 pages