Urban Agglomeration and Firm Innovation: Evidence from Asia
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This paper presents evidence on the spatial distribution and effects of urban agglomeration on firm innovation using data from 25 developing countries in Asia.
The analysis finds firm innovation to be highly concentrated at the city level. It finds that increases in city population boost firms’ propensity to introduce process and product innovations and undertake research and development activities. The paper also shows that knowledge spillovers are an important channel through which agglomeration effects occur.