Intercluster Innovation Differentials: The Role of Research Universities

We explore the role of research universities in explaining intercluster innovation differentials. Drawing on the knowledge production function, our baseline hypothesis is that cluster innovative performance is determined by the cluster´s endowment with financial, intellectual, and human capital. Leveraging fine-grained, longitudinal panel data tracking the population of medical device clusters in the USA over a 12-year time period (1990-2001), we demonstrate strong support for the notion of spatial heterogeneity in cluster innovative performance. In particular, research universities, which play a critical role by serving as a source of knowledge spillovers and producing graduates who disseminate tacit knowledge within a cluster, are a critical ingredient for innovative performance in a regional technology cluster.