Organisations and the dynamics of change in the location of American invention

Abstract

The effects of individual organisations on the location of invention in the United States is underexplored. A handful of companies generate most of the inventions in most American cities and their actions do not average out in the aggregate. Temporal stability in city system properties corroborates agglomeration theories built on models of monopolistic competition that treat all firms as small and uninfluential. However, substantial churn in patenting occurs in individual cities. Churn is associated with the strategic choices made by particular firms as they expand and contract their inventive assets. The effects of idiosyncratic decisions on levels and growth of patenting are revealed. A novel inverse-size volatility hypothesis is tested that is consistent with a claim that beyond the largest most inventive cities individual organisations are highly influential and identifiable. The findings are compatible with recognition that variety in market structures is essential to understanding the location and growth of invention in the American urban system.