How do neighborhood tech clusters shape the technological diversification of cities?
- Jul 7
- 1 min read
The clustering of economic activities is widely considered to be a key driver of economic competitiveness. However, little is known about how technological activities are clustered *within* cities, as the existing literature tends to treat cities as homogenous units, neglecting their neighborhood dynamics and heterogeneity.
In this paper, Ziyu Chen, Xiaohu Zhang and I develop a novel measurement framework to identify neighborhood-level technology clusters within 260 Chinese cities, using 16 million geo-coded patents from 2003 to 2018. We then link this neighborhood-level clustering measure with the rate, direction and complexity of citywide diversification in patenting activities.
We find that neighborhood-level clusters (1) contribute to an increasing rate of technological diversification at the city level; (2) channel diversification toward technologies related to existing specializations; and (3) are associated with more complex diversification.
Our results suggest that zooming in on the micro-dynamics of tech clusters provides a more nuanced view of their advantages than is typically assumed. These findings have implications for cluster policies, which often target cities or regions as a whole, while the knowledge spillovers driving diversification operate at the neighborhood level.
Available in Research Policy:
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