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A Take of Two Americas: the Evolution of Innovation Networks across US Cities

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  • Hyunju Lee

    (University of Minnesota)

  • Alessandra Fogli

    (Minneapolis Federal Reserve Bank)

Abstract

We analyze the geographic dimension of innovation. Innovation is the critical component of long term prosperity and it is unevenly distributed across US. Using data on 1.8 million US patents and their citation properties, we map the innovation network of all major US cities over the last three decades. We find that the innovation gap among cities, which was shrinking until 1980, has recently started growing, generating divergence. We develop a network model of cities that captures the knowledge spillovers within and across industries as well as within and across cities, and calibrate it using information on the patterns of patents citations. We show that the IT revolution, by reducing the cost of information exchange across cities, induced an endogenous response of the network structure of cities. This change in network structure can explain a large part of the recent divergence in innovation patterns across cities, and is consistent with a number of stylized facts about the evolution of US cities over the past thirty years.

Suggested Citation

  • Hyunju Lee & Alessandra Fogli, 2017. "A Take of Two Americas: the Evolution of Innovation Networks across US Cities," 2017 Meeting Papers 1630, Society for Economic Dynamics.
    • Handle: RePEc:red:sed017:1630
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