effect of the composition of economic activity on innovation. We test whether the specialization of economic activity within … a narrow concentrated set of economic activities is more conducive to knowledge spillovers or if diversity, by bringing … together complementary activities, better promotes innovation. The evidence provides considerable support for the diversity …

industry life cycle. The theory of knowledge spillovers, based on the knowledge production function for innovative activity …, suggests that geographic proximity matters most in industries where tacit knowledge plays an important role in the generation … of innovative activity. According to the emerging literature on the industry life cycle, tacit knowledge plays the most …