Agglomeration and Innovation

62 Pages Posted: 6 Aug 2014

See all articles by Gerald A. Carlino

Gerald A. Carlino

Federal Reserve Bank of Philadelphia

William Kerr

Harvard University - Entrepreneurial Management Unit

Multiple version iconThere are 3 versions of this paper

Date Written: August 5, 2014


This chapter reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then describe how these factors are frequently measured in the data and some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we 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

Suggested Citation

Carlino, Gerald A. and Kerr, William R., Agglomeration and Innovation (August 5, 2014). Harvard Business School Entrepreneurial Management Working Paper No. 15-007, Available at SSRN: or

Gerald A. Carlino

Federal Reserve Bank of Philadelphia ( email )

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

William R. Kerr (Contact Author)

Harvard University - Entrepreneurial Management Unit ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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