Knowledge Spillovers and the Geography of Entrepreneurship and Innovation

Abstract

The revolution of communications technology now allows firms and individuals to acquire knowledge and information that stems from distant geographies. Yet, the geographic proximity to knowledge sources continues to play a central role in fostering knowledge transfers. This dissertation examines the role of knowledge spillovers within geographies in influencing entrepreneurship and innovation outcomes. In particular, I investigate underexplored dynamics of geographic agglomeration of industry activity and how they affect knowledge spillovers that are central to entrepreneurship and innovation. I base my investigation on two studies. In the first study, I use data on nanotechnology firms to examine the effects of de-agglomeration, in the form of a proximate industry peer’s relocation, on firm innovation. Contrary to expectation, I find that a proximate industry peer's relocation to another region increases a firm’s innovation performance. Knowledge exchange channels that exist between proximate industry peers before relocation transform into inter-region knowledge conduits post-relocation. Hence, firms gain greater access to distant knowledge once a proximate industry peer relocates to that region. In the second study, I examine the effects of industry agglomeration on the gender gap in employee entrepreneurship. This study proposes that female employees are disadvantaged in gaining knowledge on entrepreneurial resources relative to male employees when the level of industry agglomeration increases in the employee’s region. I combine several datasets to construct an employee panel on the universe of U.S.-based biotechnology employees from 2005 to 2019. I find that industry agglomeration facilitates female employees’ transitions into entrepreneurship but at a significantly lower rate than male employees. This study demonstrates that agglomeration may be exacerbating the gender gap in regional employee entrepreneurship and provides insights into conditions that could reduce the gap.