What happens to firms’ innovation activities when new firms enter or leave their urban neighbourhood? We empirically explore the role of knowledge spillovers through firm dynamics using firm-level panel data from Berlin. The results indicate that an increase in firm activities in the neighbourhood through entries and influx positively relates to incumbents’ innovation activities. This finding is restricted to diversity externalities which work on a very small microgeographic scale, vanishing already after a quarter of a kilometre. For specialisation externalities through firm dynamics, we cannot find a link to innovation in incumbents.
AgrawalACockburnIMcHaleJ (2006) Gone but not forgotten: Knowledge flows, labor mobility, and enduring social relationships. Journal of Economic Geography6(5): 571–591.
2.
AlcácerJChungW (2007) Location Strategies and knowledge spillovers. Management Science53(5): 760–776.
3.
AlmeidaPKogutB (1999) Localization of knowledge and the mobility of engineers in regional networks. Management Science45(7): 905–917.
4.
AnderssonMKlaessonJLarssonJP (2016) How local are spatial density externalities? Neighbourhood effects in agglomeration economies. Regional Studies50(6): 1082–1095.
5.
AnderssonMLarssonJP (2016) Local entrepreneurship clusters in cities. Journal of Economic Geography16(1): 39–66.
6.
AnderssonMLarssonJPWernbergJ (2019) The economic microgeography of diversity and specialization externalities – Firm-level evidence from Swedish cities. Research Policy48(6): 1385–1398.
7.
ArzaghiMHendersonJV (2008) Networking off Madison avenue. Review of Economic Studies75(4): 1011–1038.
8.
Atakhan-KennewegMOerlemansLAGRaabJ (2021) New inter-organizational knowledge tie formation after firm relocation: Investigating the impact of spatial, relational, and temporal context. Journal of Business Research127: 264–276.
9.
AudretschDBFeldmanMP (2004) Chapter 61 – knowledge spillovers and the geography of innovation. In: HendersonJVThisseJ-F (eds) Cities and Geography. Amsterdam: Elsevier, pp.2713–2739.
10.
BalbontinCHensherDA (2019) Firm-specific and location-specific drivers of business location and relocation decisions. Transport Reviews39(5): 569–588.
11.
BallandP-AJara-FigueroaCPetraliaSG, et al. (2020) Complex economic activities concentrate in large cities. Nature Human Behaviour4(3): 248–254.
12.
BattyM (2017) The New Science of Cities. London, MA: The MIT Press.
13.
BeaudryCSchiffauerovaA (2009) Who’s right, Marshall or Jacobs? The localization versus urbanization debate. Research Policy38(2): 318–337.
14.
BelderbosRBenoitFEdetS, et al. (2022) Global cities’ innovation network. In: CastellaniDPerriAScaleraVGet al. (eds) Cross-Border Innovation in a Changing World: Players, Places, and Policies. Oxford: Oxford University Press, pp. 160–185.
15.
BernsteinSColonnelliEGiroudX, et al. (2019) Bankruptcy spillovers. Journal of Financial Economics133(3): 608–633.
16.
BerschJGottschalkSMuellerB, et al. (2014) The Mannheim Enterprise Panel (MUP) and firm statistics for Germany. Discussion Paper No. 14-104, ZEW - Centre for European Economic Research. Available at SSRN: https://ssrn.com/abstract=2548385 or http://dx.doi.org/10.2139/ssrn.2548385
17.
BoixRHervás-OliverJLDe Miguel-MolinaB (2015) Micro-geographies of creative industries clusters in Europe: From hot spots to assemblages. Papers in Regional Science94(4): 753–773.
18.
BrouwerAEMariottiIvan OmmerenJN (2004) The firm relocation decision: An empirical investigation. Annals of Regional Science38(2): 335–347.
19.
CarlinoGAChatterjeeSHuntRM (2007) Urban density and the rate of invention. Journal of Urban Economics61(3): 389–419.
20.
CataliniC (2018) Microgeography and the direction of inventive activity. Management Science64(9): 4348–4364.
21.
ChoudhuryP (2022) Geographic mobility, immobility, and geographic flexibility: A review and agenda for research on the changing geography of work. Academy of Management Annals16(1): 258–296.
22.
CohenWM (2010) Fifty Years of empirical studies of innovative activity and performance. In: HallBHRosenbergN (eds) Handbook of the Economics of Innovation, vol. 1. Amsterdam and Oxford: Elsevier, pp.129–213.
23.
CohenWMLevinthalDA (1990) Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly35(1): 128.
24.
ColomboLDawidHPivaM, et al. (2017) Does easy start-up formation hamper incumbents’ R&D investment?Small Business Economics49(3): 513–531.
25.
CrowleyFJordanD (2022) Do local start-ups and knowledge spillovers matter for firm-level R&D investment?Urban Studies59(5): 1085–1102.
26.
de GrootHLFPootJSmitMJ (2016) Which agglomeration externalities matter most and why?Journal of Economic Surveys30(4): 756–782.
27.
DurantonGPugaD (2004) Chapter 48 – micro-foundations of urban agglomeration economies. In: HendersonJVThisseJ-F (eds) Cities and Geography. Amsterdam: Elsevier, pp.2063–2117.
28.
FeldmanMPAudretschDB (1999) Innovation in cities. European Economic Review43(2): 409–429.
29.
FISBroker (2022) Geoportal FIS Broker, Stadt Berlin. Senatsverwaltung für Stadtentwicklung, Bauen und Wohnen, Abteilung Geoinformation. Available at: https://fbinter.stadt-berlin.de/fb/index.jsp (accessed 26 July 2022).
30.
FritschMPylakKWyrwichM (2022) Historical roots of entrepreneurship in different regional contexts–the case of Poland. Small Business Economics59(1): 397–412.
31.
GreenstoneMHornbeckRMorettiE (2010) Identifying agglomeration spillovers: Evidence from winners and losers of large plant openings. Journal of Political Economy118(3): 536–598.
32.
HinzeA (2013) Turkish Berlin: Integration Policy and Urban Space/Annika Marlen Hinze. Minneapolis, MN: University of Minnesota Press.
33.
HollAPetersBRammerC (2023) Local knowledge spillovers and innovation persistence of firms. Economics of Innovation and New Technology32: 826–850.
34.
HuntJ (2013) Are Immigrants the Best and Brightest U.S. Engineers? Working Paper Series No. 18696, National Bureau of Economic Research, Cambridge, Massachusetts.
35.
HuntJGauthier-LoiselleM (2010) How much does immigration boost innovation?American Economic Journal Macroeconomics2(2): 31–56.
36.
JacobsJ (1969) The Economy of Cities. New York, NY: Vintage.
37.
JangSKimJvon ZedtwitzM (2017) The importance of spatial agglomeration in product innovation: A microgeography perspective. Journal of Business Research78: 143–154.
38.
KerrWLincolnW (2010) The supply side of Innovation: H-1B visa reforms and U.S. Ethnic Invention. Journal of Labor Economics28(3): 473–508.
39.
KriegerBRammerCBreithauptP (2020) Identifizierung von Querschnittsthemen in Projekten der Direkten Projektförderung des BMBF: Bericht zur Machbarkeitsstudie.
40.
LavoratoriKCastellaniD (2021) Too close for comfort? Microgeography of agglomeration economies in the United Kingdom. Journal of Regional Science61(5): 1002–1028.
41.
MalmbergAMaskellP (2002) The Elusive Concept of localization economies: Towards a knowledge-based theory of spatial clustering. Environment and Planning A34(3): 429–449.
42.
MarshallA (1890) Principles of Economics. London: Macmillan.
43.
MasonCMHarrisonRT (2006) After the exit: Acquisitions, entrepreneurial recycling and regional economic development. Regional Studies40(1): 55–73.
44.
MoellerK (2018) Culturally clustered or in the cloud? How amenities drive firm location decision in Berlin. Journal of Regional Science58(4): 728–758.
45.
MorettiE (2021) The effect of high-tech clusters on the productivity of top inventors. American Economic Review111(10): 3328–3375.
46.
OECD/Eurostat (2018) Oslo Manual 2018: Guidelines for Collecting, Reporting and Using Data on Innovation, 4th edn. Paris/Eurostat, Luxembourg: OECD. https://doi.org/10.1787/9789264304604-en
47.
PetersBRammerC (2023) Innovation panel surveys in Germany: The Mannheim Innovation Panel. In: GaultFRundelAKraemer-MbulaAE, (eds) Handbook of Innovation Indicators and Measurement. Cheltenham: Edward Elgar Publishing, pp.54–87.
48.
RammerCKinneJBlindK (2020) Knowledge proximity and firm innovation: A microgeographic analysis for Berlin. Urban Studies57(5): 996–1014.
49.
RocheMP (2020) Taking innovation to the streets: Microgeography, physical structure, and innovation. Review of Economics and Statistics102(5): 912–928.
50.
RocheMPOettlACataliniC (2024) Proximate (co-)working: Knowledge spillovers and social interactions. Management Science. Epub ahead of print 14February2024. DOI: 10.1287/mnsc.2022.03555
51.
RoperSLoveJHBonnerK (2017) Firms’ knowledge search and local knowledge externalities in innovation performance. Research Policy46(1): 43–56.
52.
SevtsukA (2014) Location and agglomeration. Journal of Planning Education and Research34(4): 374–393.
53.
SpigelBVinodraiT (2021) Meeting its Waterloo? Recycling in entrepreneurial ecosystems after anchor firm collapse. Entrepreneurship and Regional Development33(7–8): 599–620.
54.
StorperMVenablesAJ (2004) Buzz: Face-to-face contact and the urban economy. Journal of Economic Geography4(4): 351–370.
55.
VerginerLRiccaboniM (2021) Talent goes to global cities: The world network of scientists' mobility. Research Policy50(1): 104127.
56.
ZacchiaP (2018) Benefiting colleagues but not the city: Localized effects from the relocation of superstar inventors. Research Policy47(5): 992–1005.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
