Innovation

Not Invented Here? Innovation In Company Towns

Date Added: Oct 2009
Format: PDF

The authors examine variation in the concentration of inventive activity across 72 of North America's most highly innovative locations. In 12 of these areas, innovation is particularly concentrated in a single, large firm; they refer to such locations as "Company towns." They find that inventors employed by large firms in these locations tend to draw disproportionately from their firm's own prior inventions (as measured by citations to their own prior patents) relative to what would be expected given the underlying distribution of innovative activity across all inventing firms in a particular technology field.