Cities and Ideas

25 Pages Posted: 2 Feb 2015 Last revised: 3 Feb 2015

See all articles by Mikko Packalen

Mikko Packalen

University of Waterloo - Department of Economics

Jay Bhattacharya

Stanford University - Center for Primary Care and Outcomes Research; National Bureau of Economic Research (NBER)

Date Written: January 2015

Abstract

Faster technological progress has long been considered a key potential benefit of agglomeration. Physical proximity to others may help inventors adopt new ideas in their work by increasing awareness about which new ideas exist and by enhancing understanding of the properties and usefulness of new ideas through a vigorous debate on the ideas' merits (Marshall, 1920). We test a key empirical prediction of this theory: that inventions in large cities build on newer ideas than inventions in smaller cities. We analyze the idea inputs of nearly every US patent granted during 1836–2010. We find that a larger city size provided a considerable advantage in inventive activities during most of the 20th century but that in recent decades this advantage has eroded.

Suggested Citation

Packalen, Mikko and Bhattacharya, Jayanta, Cities and Ideas (January 2015). NBER Working Paper No. w20921, Available at SSRN: https://ssrn.com/abstract=2558973

Mikko Packalen (Contact Author)

University of Waterloo - Department of Economics ( email )

Waterloo, Ontario N2L 3G1
Canada

Jayanta Bhattacharya

Stanford University - Center for Primary Care and Outcomes Research ( email )

Center for Health Policy
179 Encina Commons
Stanford, CA 94305-6019
United States
650-736-0404 (Phone)
650-723-1919 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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