TY - JOUR AU - Agrawal,Ajay K. AU - Cockburn,Iain M. AU - Rosell,Carlos TI - Not Invented Here? Innovation in Company Towns JF - National Bureau of Economic Research Working Paper Series VL - No. 15437 PY - 2009 Y2 - October 2009 UR - http://www.nber.org/papers/w15437 L1 - http://www.nber.org/papers/w15437.pdf N1 - Author contact info: Ajay K. Agrawal Rotman School of Management University of Toronto 105 St. George Street Toronto, ON M5S 3E6 CANADA Tel: 416/946-0203 Fax: 416/978-5433 E-Mail: ajay.agrawal@rotman.utoronto.ca Iain M. Cockburn School of Management Boston University 595 Commonwealth Ave Boston, MA 02215 Tel: 617/588-1486 Fax: 815/550-2353 E-Mail: cockburn@bu.edu Carlos Rosell Department of Finance Canada L'Esplanade Laurier, 18th Floor East Tower 140 O'Connor Street Ottawa, Canada K1A 0G5 Tel: 613-947-5480 Fax: 613-992-5773 E-Mail: carlos.rosell@fin.gc.ca AB - We examine variation in the concentration of inventive activity across 72 of North America's most highly innovative locations. In 12 of these areas, innovation is particularly concentrated in a single, large firm; we refer to such locations as "company towns.'' We find that inventors employed by large firms in these locations tend to draw disproportionately from their firm's own prior inventions (as measured by citations to their own prior patents) relative to what would be expected given the underlying distribution of innovative activity across all inventing firms in a particular technology field. Furthermore, we find such inventors are more likely to build upon the same prior inventions year after year. However, smaller firms in company towns do not exhibit this myopic behavior; they draw upon prior inventions as broadly as their small-firm counterparts in more diverse locations. In addition, we find that inventions by large firms in company towns have less impact than those produced elsewhere, although the difference is modest, and that the impact is disproportionately appropriated by the inventing firms themselves. Finally, the geographic scope of impact realized by company town inventions is narrower, whether produced by large or small firms. ER -