Manufacturing Clusters and Firm Innovation

This study examines how much different manufacturing clusters encourage per-establishment innovation measured by citation-weighted patent applications, and at which geographical scales they boost patent filings by the greatest magnitude. Using establishment and patent application data for the state of Maryland, 2004-2013, this study finds that the Metalworking Technology cluster, formed at 3 miles in radius, encourages innovation the most: The number of citation-weighted patent applications for firms in the cluster is 17.6% higher than that outside of the cluster. Food Processing and Manufacturing and Automotive clusters follow, at 1 and 2 mile(s) in radius, with an effect of 8.5% and 5.5%, respectively. A complete ranking of 20 manufacturing clusters is delivered. A description of how policy makers may use this ranking to target specific manufacturing clusters for economic development is included