While studies have suggested that innovative activities are more concentrated in large own-industry agglomerations when an industry is more innovative, less known is whether this spatial pattern can be partly explained by firms’ movement to and from large own-industry agglomerations. In this study, we examine how industry innovation dynamics affect firms’ relocation to and out of large own-industry agglomerations. We predict that during times when an industry is more innovative, firms are more likely to relocate to and less likely to relocate out of large own-industry agglomerations. In addition, the effects are stronger for industries that are more spatially concentrated. Empirical analyses of a panel of high-tech firms in 14 industries using the U.S. micro-census data lend support to our predictions.
