Trade, innovation and agglomeration. A case study for Colombia

Abstract

This paper focuses on the relationship between imports, innovation and population agglomeration within regions in Colombia. The main aim is to identify the source of trade that shapes the relationship between innovation and agglomeration, by distinguishing imports according to levels of technological intensity. This study attempts to bridge two factors that have been studied separately: trade on the one hand; science, technology and innovation activity (STI), on the other. To control for unobserved heterogeneity, the Least Square Dummy Variable estimator with robust standard errors was employed. The results show that the technological intensity of imports has an impact on the agglomeration effect of STI activity. Moreover, the effect of STI activity on intra-regional agglomeration conditioned by imports varies according to regional characteristics.