Booming Bohemia? Evidence from the U.S. High-Technology Industry

Industry and Innovation, Vol. 17, Issue 1, pp. 23-48, 2010

Posted: 11 Sep 2012

See all articles by David S. Bieri

David S. Bieri

Virginia Tech - School of Public and International Affairs (SPIA); Virginia Tech - Department of Economics

Date Written: February 24, 2010

Abstract

This paper assesses the effect of Richard Florida's creative class on economic growth and development at two levels of spatial aggregation. First, I examine the dynamics of economic growth across US metropolitan regions and investigate how they relate to regional specialization and the concentration of talent in the high-tech industry. In addition to evidence of significant high-tech clusters, I identify important complementarities with regard to the interaction between the three Ts of regional development (talent, technology and tolerance) and regional growth dynamics. Using firm-level data, the regional analysis is then complemented by exploring the location of new high-technology plant openings and their relationship with university research and development (R&D) and the creative class. Specifically, I test the hypothesis that both university R&D and the presence of “creativity” generate spillovers which are captured locally in the form of new high-tech establishments, after controlling for important location factors such as local cost, demand and agglomeration economies. While the marginal impacts of increased R&D funding on county probability for new firm formation is modest, the mix of creativity and diversity — as proxied by the Florida measure — appears to be a key driver in the locational choice of new high-tech firms. Separate estimates indicate that these findings hold up across the major high-tech industries in the USA.

Keywords: regional growth, firm location, creative class, high-tech industry, R&D

JEL Classification: J2, O3, R2, R3

Suggested Citation

Bieri, David S., Booming Bohemia? Evidence from the U.S. High-Technology Industry (February 24, 2010). Industry and Innovation, Vol. 17, Issue 1, pp. 23-48, 2010, Available at SSRN: https://ssrn.com/abstract=2145041

David S. Bieri (Contact Author)

Virginia Tech - School of Public and International Affairs (SPIA) ( email )

United States

Virginia Tech - Department of Economics ( email )

3021 Pamplin Hall
Blacksburg, VA 24061
United States

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