Localized Knowledge Spillovers and Skill-Biased Performance Articles uri icon

authors

  • GAMBARDELLA ., ALFONSO
  • GIARRATANA, MARCO

publication date

  • December 2010

start page

  • 323

end page

  • 339

issue

  • 4

volume

  • 4

International Standard Serial Number (ISSN)

  • 1932-4391

Electronic International Standard Serial Number (EISSN)

  • 1932-443X

abstract

  • This article focuses on a relatively unappreciated consequence of localized knowledge spillovers: their implications for productivity across skills. Spillovers benefit skilled workers more than unskilled
    ones, weaken complementarity between them, and widen their productivity
    gap. To test this theory, the authors use data from 146 U.S. cities and
    find that cities with a greater intensity of localized knowledge
    spillovers exhibit a bigger productivity gap across skills, after
    controlling for the endogeneity of knowledge spillovers, interindustry
    differences, and other factors. These results imply that in the long
    run, economies characterized by localized knowledge spillovers encourage
    investments in education and attract skilled people, raising the
    relative share of the skilled population. When complementarity across
    skills weakens, this analysis also offers a framework to link localized
    knowledge spillovers to the formation of entrepreneurial skill-intensive
    firms.