Urban Density and the Rate of Invention

Posted: 29 Aug 2006

See all articles by Gerald A. Carlino

Gerald A. Carlino

Federal Reserve Bank of Philadelphia

Satyajit Chatterjee

Federal Reserve Bank of Philadelphia

Robert M. Hunt

Consumer Finance Institute, Federal Reserve Bank of Philadelphia

Date Written: August 2006

Abstract

Economists, beginning with Alfred Marshall, have studied the significance of cities in the production and exploitation of information externalities that, today, we call knowledge spillovers. This paper presents robust evidence of those effects. We show that patent intensity - the per capita invention rate - is positively related to the density of employment in the highly urbanized portion of MAs. All else equal, a city with twice the employment density (jobs per square mile) of another city will exhibit a patent intensity (patents per capita) that is 20 percent higher. Patent intensity is maximized at an employment density of about 2,200 jobs per square mile. A city with a more competitive market structure or one that is not too large (a population less than 1 million) will also have a higher patent intensity. These findings confirm the widely held view that the nation's densest locations play an important role in creating the flow of ideas that generate innovation and growth.

Keywords: Agglomeration economies, Knowledge spillovers, Urban density, Innovation, Patents

JEL Classification: O31, R11

Suggested Citation

Carlino, Gerald A. and Chatterjee, Satyajit and Hunt, Robert M., Urban Density and the Rate of Invention (August 2006). FRB of Philadelphia Working Paper No. 06-41. Available at SSRN: https://ssrn.com/abstract=926328 or http://dx.doi.org/10.2139/ssrn.926328

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)

Satyajit Chatterjee

Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States
215-574-3861 (Phone)
215-574-4364 (Fax)

HOME PAGE: http://sites.google.com/site/chatterjeesatyajit/home

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)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
1,106
PlumX Metrics