The Agglomeration of R&D Labs

Posted: 19 Sep 2012 Last revised: 28 Apr 2015

See all articles by Gerald A. Carlino

Gerald A. Carlino

Federal Reserve Bank of Philadelphia

Robert M. Hunt

Consumer Finance Institute, Federal Reserve Bank of Philadelphia

Jake Carr

Center for Urban and Regional Analysis

Tony E. Smith

University of Pennsylvania - Department of Systems Engineering

Multiple version iconThere are 3 versions of this paper

Date Written: September 1, 2012

Abstract

We study the location of more than 1,000 research and development (R&D) labs located in the Northeast corridor of the U.S. Using a variety of spatial econometric techniques, we find that these labs are substantially more concentrated in space than the underlying distribution of manufacturing activity. Ripley’s K-function tests over a variety of spatial scales reveal that the strongest evidence of concentration occurs at two discrete distances: one at about one-quarter of a mile and another at about 40 miles. We also find that R&D labs in some industries (e.g., chemicals, including drugs) are substantially more spatially concentrated than are R&D labs as a whole.

Tests using local K-functions reveal several concentrations of R&D labs that appear to represent research clusters. We verify this conjecture using significance maximizing techniques (e.g., SATSCAN) that also address econometric issues related to “multiple testing” and spatial autocorrelation.

We develop a new procedure for identifying clusters – the multiscale core-cluster approach, to identify labs that appear to be clustered at a variety of spatial scales. Locations in these clusters are often related to basic infrastructure such as access to major roads. There is significant variation in the industrial composition of labs across these clusters.

The clusters we identify appear related to knowledge spillovers: Citations to patents previously obtained by inventors residing in clustered areas are significantly more localized than one would predict from a (control) sample of otherwise similar patents.

Note: This paper has been superseded by WP 15-03. This paper supersedes working papers 10-33 and 11-42.

Keywords: Spatial clustering of R&D labs, measures of geographic concentration, localized knowledge spillovers, patent citations

JEL Classification: O31, R12

Suggested Citation

Carlino, Gerald A. and Hunt, Robert M. and Carr, Jake and Smith, Tony E., The Agglomeration of R&D Labs (September 1, 2012). FRB of Philadelphia Working Paper No. 12-22. Available at SSRN: https://ssrn.com/abstract=2149008 or http://dx.doi.org/10.2139/ssrn.2149008

Gerald A. Carlino (Contact Author)

Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States
215-574-6434 (Phone)
215-574-4364 (Fax)

Robert M. Hunt

Consumer Finance Institute, Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States
215-574-3806 (Phone)
215-574-7101 (Fax)

Jake Carr

Center for Urban and Regional Analysis ( email )

0126 Derby Hall
154 North Oval Mall
Columbus, OH 43210
United States

Tony E. Smith

University of Pennsylvania - Department of Systems Engineering ( email )

School of Engineering & Applied Science
3718 Locust Walk
Philadelphia, PA 19104
United States
215-898-9647 (Phone)
215-898-5020 (Fax)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
591
PlumX Metrics