Does urban form matter for innovation productivity? A national multi-level study of the association between neighbourhood innovation capacity and urban sprawl

Geography of innovation, creative clustering, urban buzz and innovation districts are place-based concepts that have emerged as a result of the US economy’s transformation to knowledge-intensive economies. The notable built environment characteristics of these concepts are spatial clustering, walkability and proximity to urban amenities, diversity, regional connectivity and agglomeration. While several of these characteristics have been associated with urban sprawl in previous studies, there is a lack of direct evidence on how urban sprawl affects innovation productivity. This national study seeks to examine the relationship between urban sprawl, place-based characteristics and innovation productivity. We used Multilevel Modelling to account for built environment characteristics at both neighbourhood and regional levels. We found that innovative firms tend to locate more in census tracts that are less compact but offer spatial proximity to firms in related business sectors. This is likely due to the higher land and property value in compact areas, which could make it unaffordable for small businesses. We also found that the regional compactness positively and significantly affects the number of innovative firms. This is likely due to the role of compact regions in supporting public transit investments, enhancing social capital and reducing poverty and racial segregation.