Academic papers written by IBRC staff are listed in reverse chronological order below.
Sources of innovation and innovation type: Firm-level evidence from the United States
Industrial and Corporate Change, Mar 2019
Only a handful of studies on innovation empirically analyze the links between firm innovation and the sources of that innovative activity of sources of innovation on types of innovation. To fill this gap in the literature, this study provides one of the first tests to identify how important sources of new information (suppliers, customers, other business people in the industry, workers, and university) are associated with types of innovations (product, process, and marketing). Data come from the 2014 National Survey of Business Competitiveness sponsored by the Economic Research Service at the United States Department of Agriculture (n = 10,952). The results show that innovation ideas emanating from customers, workers, and universities are positively associated with all types of innovations, suggesting that these sources are critical for developing different types of innovation. In particular, universities as a source of innovation activity are especially important. In contrast, other sources, such as suppliers and people in industry do not seem to be as important as a source of innovation.
Automation and Offshoring in Durable Goods Manufacturing: An Indiana Case Study
Economic Development Quarterly, Nov 2018
The loss of manufacturing jobs is largely attributed to either offshoring or automation. Using state-level data from the Annual Survey of Manufactures and unit record administrative data from the Indiana Department of Workforce Development, we determine the drivers of durable goods manufacturing employment losses in Indiana. We test a simple model that explains changes in industry production employment by changes in output, wages, intermediate input consumption, productivity, capital-to-labor ratios, or a proxy related to these explanatory variables. Using the unit record data, the authors assess the consequences of large layoff events on the wages of those who remain employed at a particular manufacturing establishment. The data suggest that offshoring was the primary driver for employment losses and productivity gains in Indiana, not automation. We also find that average wages for workers at establishments that experienced large redundancy events rose for those workers who remained after large layoff events.
Digital Vapor Trails: Using Website Behavior to Nowcast Entrepreneurial Activity
Conference Proceedings, Nov 2018
Following recent research, we explore virtually contemporaneous, and geographically granular, user online activity related to entrepreneurship. In this paper, we present evidence that data harvested by Dstillery can complement efforts of, and data collected by, government agencies and organizations advocating for entrepreneurship, business formation and economic growth, e.g., the Kauffman Foundation. Our website-based behavior data is close to real time and at a geographically granular level. We find that the concentration of a region’s visits to website resources for entrepreneurship and business development are statistically related to business start-up and, particularly, growth activity. Visits to websites related to entrepreneurship are more strongly associated with growth entrepreneurship, in contrast to start-up entrepreneurship. While data capture and analysis related to entrepreneurship website activity is in its infancy, this analysis points to the potential of this data source to nowcast business formation and growth at a regional level.
While the literature on agglomeration externalities has emphasized the competitive and productivity benefits associated with the concentration and co-location of related industries – i.e., industry clusters – the research is sparse on whether regions with specialized industry clusters magnetically attract investment from firms outside the region. Agglomeration externalities create benefits for related industries to co-locate, but to what degree do these externalities attract similar or complementary industries? In this paper, we address whether, and to what degree, agglomeration externalities magnetically attract new operations and employment into a region. Using greenfield foreign direct investment data at the U.S. county level, we conclude that firms are more likely to invest in new or expanded facilities in regions that have a high absolute concentration of employment in their specific industry. Whether this magnetic attraction occurs for complementary industries within an industry cluster, the data suggest that there is a difference between high-tech and not high-tech industries. We also find that that several regional characteristics that are considered important by site selectors -- those informing the FDI location decisions -- are more salient than other regional characteristics and attributes, for example, the availability of labor. We also find that certain state-level characteristics are also positively associated with greenfield FDI flows, such as lower electricity costs and good state governance. These results are largely similar and robust across statistical methods -- OLS, logit, negative binomial and pseudo-panel -- as well as dependent variables.
Industry Clusters and Regional Economic Performance: A Study Across U.S. Metropolitan Statistical Areas
Economic Development Quarterly, Feb 2018
Cluster theory provides a framework for analyzing regional industry dynamics. Definitions and categorizations of clusters vary, however, hindering the development of econometric models for cluster analysis. The authors propose empirical measures relevant to researchers and practitioners for cluster strength/specialization, cluster diversity/diversification, and identifying regional growth clusters. The latter measure uses location quotients, shift-share analysis, and other criteria to identify robust clusters that are important for thriving regions. These measures are calculated for local and traded clusters using employment data for 366 U.S. metropolitan statistical areas. Additionally, the authors estimated the relationship of their cluster performance measures to four traditional measures of economic performance: growth in gross domestic product, productivity per employee, compensation per employee, and personal income. The authors find traded cluster strength is positively related to compensation per employee growth and positively related to productivity growth, the latter being consistent with expected Marshall-Arrow-Romer externalities. Traded growth clusters are positively related to gross domestic product growth.
University Knowledge Spillovers, Geographic Proximity and Innovation: An Analysis of Patent Filings Across U.S. Counties
SSRN, Oct 2016
The literature suggests that knowledge production intensity depends upon the geographic proximity of knowledge and information sources. On the other hand, there have been arguments that the rapid development of communication technologies would reduce the importance of proximity to the production of knowledge. That is, distance would not matter. In this paper, we propose a measure for university knowledge spillovers as a gauge for the importance of proximity to knowledge creation. Using a cross-section of 3110 United States counties in recent years - 2009 to 2011 - we empirically test the relationship between knowledge spillovers and innovative activities as measured by patent filings. We use university research and development (R&D) expenditures in STEM fields as the foundation for our metric of knowledge spillovers and a decay function to reflect the diminishing influence of those expenditures as the distance from the university increases. Using patent counts to measure the local technological innovation as our dependent variable, we test knowledge spillovers as spherical scores of university R&D expenditures as our explanatory variables of interest using three distance thresholds - 50, 100 and 250 miles. We also control for the private R&D intensity and regional social and economic characteristics, including a county’s employment density, educational attainment, proprietorship rates and venture capital inflows. We find that the influence of university knowledge spillovers can reach as far as 250 miles, but evidence that spillovers decline with distance is not unambiguous. Research intensive counties exhibit different spillover effects from counties without research anchor institutions. We find evidence that counties with higher concentrations of R&D expenditures and concentrations of science and engineering programs will exhibit higher patent rates.
Theory and Measurement in Social Capital Research
Social Indicators Research, Mar 2016
In 1988, James Coleman observed that "social capital is defined by its function. It is not a single entity but a variety of different entities, with two elements in common: they all consist of some aspect of social structures, and they facilitate certain actions of actors-whether persons or corporate actors-within the structure." If one looks at the state of social capital research, it is clear that this is truer than ever before. This paper seeks to help researchers overcome the major challenges of social capital research, namely, measuring a concept that is notoriously difficult for measurement and choosing among the exhaustive list of direct, casual and consequential measures. It does so by arguing for a typology of social capital that considers five major types of social capital and then reviewing a diverse selection of data available from national surveys. This provides a resource for scholars wishing to pursue large-scale social capital research. Additionally, it draws six lessons from this body of theory and measurement to improve the study of social capital.
Book Review: Running the numbers: A practical guide to regional economic and social analysis
Economic Development Quarterly, Oct 2014
Running the Numbers: A Practical Guide to Regional Economic and Social Analysis (2014), written by research consultant John Quinterno, represents an admirable effort to make data less scary and data analysis more relevant to economic development practitioners (EDPs). Researchers would also do well by keeping this handy for reference.
The Index of Innovation: A New Tool for Regional Analysis
Economic Development Quarterly, Nov 2010
Attempts to create an index of innovation have focused almost exclusively on countries or states. These existing indices also weigh various drivers of innovation equally without regard to their relative effect on economic development. This article has two distinct parts. In Part I the authors develop an index of innovation at the county level. They describe the rationale for selecting innovation measures based on the literature. This section goes into detail about measures and data. Part II statistically analyzes the data for all U.S. counties to assess the relative importance of the innovation factors on GDP-per-worker growth. The researchers also investigate whether the relative importance of the drivers of innovation differ depending on county scale and other characteristics that are often used to differentiate rural from urban. Initial analysis suggests that innovation influences can vary depending on the size of the county and the rural-urban divide.