Relatedness and technological change in cities: the rise and fall of technological knowledge in US metropolitan areas from 1981 to 2010

Abstract

This article investigates by means of US Patent and Trademark Office (USPTO) patent data whether technological relatedness at the city level was a crucial driving force behind technological change in 366 US cities from 1981 to 2010. Based on a three-way fixed-effects model, we find that the entry probability of a new technology in a city increases by 30% if the level of relatedness with existing technologies in the city increases by 10%, while the exit probability of an existing technology decreases by 8%.