Exploratory Innovation in Cities: Inter-city Ties and Technological Relatedness

This paper draws on extant literature on entry into new technology domains by examining the impact of collaboration structure and technological relatedness on the likelihood of entry. We posit that the likelihood that a city explores or enters a new technology domain is facilitated by the inter-city collaborative ties to external inventors who have previously invented in the new domain, and this effect is positively moderated by the size (number of inventors) of the partner city. Also, we hypothesize that the relatedness of the technology base of the city with the new domain positively affects the likelihood of entry, and this effect should be positively moderated by the focal city size (number of inventors). Based on a newly developed geo-reference patent database, we analyze the exploratory activities of 1220 cities (located in six continents) in 646 technological IPCs between 2005-2014 and find significant support for all hypothesis except for the moderating role of focal city size. Finally, we provide evidence that entering a new domain collaboratively increases the technological performance of the city in the new domain.