The Returns to Face-to-Face Interactions: Knowledge Spillovers in Silicon Valley

54 Pages Posted: 23 Jun 2022

See all articles by David Atkin

David Atkin

Massachusetts Institute of Technology (MIT)

M. Keith Chen

University of California, Los Angeles (UCLA) - Anderson School of Management

Anton Popov

Massachusetts Institute of Technology (MIT)

Date Written: June 2022

Abstract

The returns to face-to-face interactions are of central importance to understanding the determinants of agglomeration. However, the existing literature studying patterns of geographic proximity in patent citations or industrial co-location has struggled to disentangle the benefits of face-to-face interactions from other spatial spillovers. In this paper, we use highly granular smartphone geolocation data to measure face-to-face interactions (or meetings) between workers at different establishments in Silicon Valley. To study the degree to which knowledge flows result from such interactions, we explore the relationship between these meetings and the citations among the firms these workers belong to. As firms may organize meetings with those they wish to learn from, we isolate causal impacts of face-to-face meetings by instrumenting with the meetings between workers in adjacent firms that belong to unconnected industries. Our IV approach estimates substantial returns to face-to-face meetings with overidentification tests suggesting we are capturing the returns to serendipity that play a central role in the urban theories of Jane Jacobs.

Keywords: Estimation of agglomeration economies, Face-to-face Interactions, Knowledge Spillovers, Serendipity

JEL Classification: O18, O3, R3

Suggested Citation

Atkin, David and Chen, Keith and Popov, Anton, The Returns to Face-to-Face Interactions: Knowledge Spillovers in Silicon Valley (June 2022). CEPR Discussion Paper No. DP17377, Available at SSRN: https://ssrn.com/abstract=4144708

David Atkin (Contact Author)

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Keith Chen

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

HOME PAGE: http://www.anderson.ucla.edu/faculty/keith.chen/index.html

Anton Popov

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

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