Neighborhood, knowledge exchange and innovation: evidence from the city-region of Montreal (Canada)

Joint with D. Doloreux and R. Shearmur

In this study we explore one of the fundamental relationships in economic geography: the one between neighborhood characteristics, local knowledge exchange, and firm innovation. To this end we combine two sources of data: demographic, educational, employment and mobility characteristics of Montreal’s smallest census units and the results of an original firm survey. Through principal component analysis and subsequent clustering, we define five types of neighborhoods. Surveyed firms assign higher importance to local knowledge exchange when located in dense, walkable neighborhoods with higher educated residents. Knowledge exchange in turn correlates with incremental and radical innovation. However, neighborhood characteristics do not directly relate to innovation: knowledge exchange can foster innovation anywhere.