Abstract: Spatial Diversity in Invention: Evidence from the Early R&D Labs

Tom Nicholas

Abstract

This article establishes a link between spatial diversity in invention and knowledge capital accumulation using a unique data set of inventor and firm R&D lab locations for the 1920s. Despite the localization of inventive activity within the labs, one-quarter of inventors lived outside a 30-mile commuting radius of the nearest facility of the firm they assigned their patents to. I find a strong positive effect of distance from a lab on the technological significance of inventions, which is driven by inventors outside the 30-mile radius who were located close to an entirely different large city from the firm's labs. There is some evidence to suggest that firms sourced complementary, not substitute, inventions from these locations.