The Importance of Spatial Agglomeration in Product Innovation: A Microgeography Perspective

Seongsoo Jang*, Jinwon Kim, Max von Zedtwitz

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review


This study focuses on how innovation in general and product innovation in particular are influenced by firms’ agglomeration in smaller local districts, the so-called microgeography of product innovation. Using spatial analytic methods on the mobile gaming industry in the Seoul Metropolitan Area, this study finds that mobile gaming firms co-locate to form sub-clusters for specializing in specific product innovation activities such as visual complexity, product price, and product upgrade. Furthermore, results show that the relationships between product innovation and sales performance differ across individual firms and sub-clusters. The findings confirm that microgeographic location plays a key role in promoting different product innovation activities within a city-level cluster. One key implication is that regional and district policy makers should consider product innovation policies based on each sub-cluster's specific product innovation potential, due to the heterogeneous agglomeration effects in product innovation activities.
Original languageEnglish
JournalJournal of Business Research
Pages (from-to)143-154
Number of pages12
Publication statusPublished - Sept 2017
Externally publishedYes


  • Microgeography
  • Product innovation
  • Spatial dependence
  • Spatial heterogeneity
  • Geographically weighted regression

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