The Geography of Research and Development Activity in the U.S.

Abstract

This study details the location patterns of R&D labs in the U.S., but it differs from past studies in a number of ways. First, rather than looking at the geographic concentration of manufacturing firms (e.g., Ellison and Glaeser, 1997; Rosenthal and Strange, 2001; and Duranton and Overman, 2005), we consider the spatial concentration of private R&D activity. Second, rather than focusing on the concentration of employment in a given industry, we look at the clustering of individual R&D labs by industry. Third, following Duranton and Overman (2005), we look for geographic clusters of labs that represent statistically significant departures from spatial randomness using simulation techniques. We find that R&D activity for most industries tends to be concentrated in the Northeast corridor, around the Great Lakes, in California’s Bay Area, and in southern California. We argue that the high spatial concentration of R&D activity facilitates the exchange of ideas among firms and aids in the creation of new goods and new ways of producing existing goods. We run a regression of an Ellison and Glaeser (1997) style index measuring the spatial concentration of R&D labs on geographic proxies for knowledge spillovers and other characteristics and find evidence that localized knowledge spillovers are important for innovative activity.

Kristy Buzard

Associate Professor of Economics

My current research focuses on the formation and maintenance of international trade agreements, conflict resolution, and innovation. I am particularly interested in the impact of international institutions, government structure and domestic political pressure on the possibilities for cooperation.