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Recent theories of economic growth suggest that increasing returns to
knowledge within regions will cause their growth rates to diverge. If
knowledge spillovers are as important as much of the theoretical
literature assumes and several recent empirical studies have found,
innovative activity should be concentrated geographically. In Discussion
Paper No. 953, Research Fellow David Audretsch and Maryann
Feldman explain and control for the geographic concentration of
production and then examine the linkages between geographic
concentration of innovative activity in the US and knowledge
externalities. They calculate Gini coefficients for the geographic
concentration of innovative activity and manufacturing value added for
specific industries from the Small Business Administration's Innovation
Data Base, which covers 8,074 commercial innovations introduced in 1982.
Measuring spatial clustering with the unit of observation at the state
level provides a crude proxy for the relevant market but corresponds to
the most important level for policy-making. They then regress their Gini
coefficients for 168 four-digit SIC industries on a number of variables
to show that production tends to be geographically more concentrated in
industries that make greater use of natural resources and skilled labour
or have higher transport costs or R&D intensities. |