Spatial Diversity in Invention: Evidence from the Early R&D Labs

Abstract

This article uses historical data on inventor and firm research and development (R&D) lab locations to examine the technological and geographic structure of corporate knowledge capital accumulation during a formative period in the organization of United States innovation. Despite the localization of inventive activity around the labs, one-quarter of inventors lived outside a 30 mile commuting radius of the nearest facility of the firm they assigned their patents to. A strong positive effect of distance from a lab on technological importance is identified, especially for inventors from large cities that were geographically separated from a firm's; labs. A patent case–control method helps explain spatial sourcing by showing that the average quality of externally available inventions was high. Firms selected complementary, not substitute, inventions from non-lab urban locations, suggesting a link between the organization and the geography of innovation.

Keywords: R&D, invention, location, cities

JEL Classification: O31, O32, O14, R12