Essays on the economic history of industrial research & development

This dissertation in its totality is an exploration into the economic geography of innovation. The time period is interesting as it is the beginning of large scale private research by industrial firms. This was a unique historical time period. The late 19th and 20th century saw the rise of large industrial firms in the US economy. These firms became technological innovators in their fields. The first chapter investigates the rise of private research and development (R&D). The private R&D lab was a major institutional innovation of the 20th century. The National Research Council conducted the first systematic enumeration of private R&D facilities in 1921 and 1927. This data allows one to follow firms through time and to see the growth of R&D facilities. The sample of firms is the top 200 industrial firms as compiled by Chandler in Scale and Scope (1990). The R&D data was supplemented with data on the principle manufacturing locations. This approach is unique for taking a firm level investigation to lab foundations. By using the geographic location choices of firms, the firm's motivations for establishing these labs may be inferred. My evidence shows the primary role for research during this era was as a complement to the firm's own manufacturing activities. The location of R&D was also influenced by academic institutions, and by the desire to locate labs close to competitor's labs or plants. These relationships can be seen as important factors in the rise of private research of US corporations.;The second chapter builds on the first. Because R&D labs were an input into research, the second chapter looks into patenting as an output of firm research. The data from the first chapter is supplemented with patent data. By matching patents to the firms they were assigned to, a proxy measure of firm innovation is created. There are different theories as to what encourages firm patenting in different localities. The previous literature has emphasized the relationship between the location of a firm competitor's research facilities and academic institutions. In addition, some authors have stressed the importance of firm production, or learning-by-doing, in firm patenting. To study the geographic distribution of firm patenting, a framework has been created to test simultaneously the leading theories for the location of firm's patent. My evidence reinforces the importance of clustering of industry and academic research. The results give evidence for the importance for learning-by-doing but less for manufacturing agglomeration in the patenting of firms. Thus, even though lab location was primarily driven by the firm's plant location in this era, the emerging relationship between industry and academia was an important factor in the rise of research clusters.;The third chapter goes into the intersection of firm leadership and innovation. Focusing on patents as a proxy for innovation, the relationship between firm size and innovation was investigated. This idea was famously first postulated by Joseph Schumpeter in Capitalism, Socialism and Democracy (1942). Schumpeter thought innovation would be conducted mainly by dominant firms. Since then, many authors have explored this hypothesis and the literature has not arrived at an unambiguous conclusion. For example, Scherer (1965) does not support the Schumpeterian thesis but Nicholas (2003) does. In addition, the spatial dimension of large firms is that they may do their innovations in different geographic locations. A rise in patenting with firm size is the level effect, and the change in the location of patents is the geographic effect. My results show no evidence for a level, or Schumpeterian effect, but rather, evidence against it. Using two different definitions of industry leadership, size and patenting, the geographic effect is confirmed. Both types of industry leaders patented less at their plant locations. However, patent leaders relied more on academic localities for innovation. In contrast, large firms patented more near their rival's manufacturing locations.