Title: Matching and learning in cities
Description: "This paper examines the  role of knowledge spillovers on innovations in metropolitan areas.  We use  patents per capita (patent intensity) in a metropolitan area as a measure of  innovation.  We find that, after controlling for other factors, patent intensity  is positively related to the number of jobs per square mile (employment  density) of metropolitan areas.  All else equal, patent intensity is about 20  percent higher in a metropolitan area with an employment density twice that of  another metropolitan area.  Absent congestion effects, since local employment  density doubles nearly four times across our sample, the implied gains in  patents per capita due to urban density are substantial.  Accounting for  congestion, we find that a metropolitan area with an employment density of  2,150 jobs per square mile&#151;about the densities of Baltimore (2,168) and  Philadelphia (2,181)&#151;optimizes patent intensity.  We also find that patent  intensity is higher in cities that have a more competitive market structure and  that are not too large (e.g., a population of less than 1 million).  These  findings confirm the widely held view that the nation's densest locations  play an important role in creating the flow of ideas that generates innovation  and growth"--Federal Reserve Bank of Philadelphia web site.
Subjects: Metropolitan areas, Patents, Regional disparities, Technological innovations
Places: United States