Knowledge Bank

What is the effect of geography on innovation? There has been a recent interest in the geographic clustering of economic activity in areas like Silicon Valley, and why these trends arise. This paper will search for the existence of the relationship between geography and innovation by looking at the various genres of music that were influential in shaping modern rock and roll music. Next, we attempt to determine why this relationship exists. Specifically, we separate the causes of innovation into two categories; structural effects and knowledge spillovers. Structural Effects are more related to the area itself, while knowledge spillovers are related to the people in the area. To test for the importance of the knowledge spillover effects we create a graphical description of the genres over time and look for mobility. Since knowledge spillovers, unlike structural effects, can change over time, if we find mobility than this implies the knowledge spillover effects are important. Here we find that every genre employed is mobile. Next we test for the importance of structural effects by looking at the distribution of structural centers versus the non-structural centers. If the structural effects are important, we would expect to find a difference between the two distributions. Here we find no evidence for the importance of structural effects. Thus, we conclude that knowledge spillovers cause innovation in Rock and Roll Music.