Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240462 
Year of Publication: 
2020
Series/Report no.: 
IFN Working Paper No. 1319
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
We exploit exogenous variation arising from the historical rollout of the Swedish railroad network across municipalities to identify the impacts of lowered interaction costs on innovative activity. A network connection led to a surge in local innovation due to an increased entry, productivity, and specialization of independent inventors. As the railroad network expanded, it further led to the emergence of a national market for ideas: inventors in connected areas began to develop ideas with applications outside the local economy, which were subsequently sold to firms along the network. Our findings suggest that the reduced interaction cost between firms, intermediaries, and inventors was a key driver of the historical emergence of a market for ideas.
Subjects: 
Technological Change
Infrastructure
Innovation
JEL: 
O30
N70
O33
Document Type: 
Working Paper

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