How do inventor networks affect urban invention?

Social networks are expected to matter for invention in cities, but empirical evidence
is still puzzling. In this paper, we provide new results on urban patenting covering more
than twenty years of European patents invented by nearly one hundred thousand inventors
located in France. Elaborating on the recent economic literatures on peer effects
and on games in social networks, we assume that the productivity of an inventor’s efforts
is positively affected by the efforts of his or her partners and negatively by the number
of these partners’ connections. In this framework, inventors’ equilibrium outcomes are
proportional to the square of their network centrality, which encompasses, as special
cases, several well-known forms of centrality (Degree, Katz-Bonacich, Page-Rank). Our
empirical results show that urban inventors benefit from their collaboration network.
Their production increases when they collaborate with more central agents and when
they have more collaborations. Our estimations suggest that inventors’ productivity
grows sublinearly with the efforts of direct partners, and that they incur no negative
externality from them having many partners. Overall, we estimate that a one standard
deviation increase in local inventors’ centrality raises future urban patenting by 13%.