How different patterns of urbanization affect regional innovation? Evidence from Russia

ABSTRACT The present paper assesses the impact of general urbanization and urbanization patterns (the number of cities of a certain size in the region) on different phases of the regional innovation process: knowledge creation, implementation, and production of innovation production. Knowledge creation is measured by patent statistics, knowledge implementation – by the share of innovative organizations, innovation production – by the volume of innovation production produced by industrial organizations. We apply the dynamic panel data model technique by using data from the period of 1998 to 2016. Our results suggest that general urbanization has a positive influence on every stage of the innovation process, while the impact of different urbanization patterns varies depending on its stage. Million plus cities affect knowledge creation in the region but have no considerable impact on knowledge implementation and innovation production. At the same time, the presence of cities with a population from 0.5 million to 1 million people in the region positively influences more mature stages of the innovation process: knowledge implementation and manufacturing of innovation production. So far as the effective innovation development demands complete innovation cycle, not only million plus cities should be considered as the main drivers of innovation, but cities of lower size (at least with population from 0.5 million to 1 million people) as well should attend the innovation agenda.