Subsidiary networks, connectivity, and urban-regional economic development

This paper argues that urban-regional income development depends on a larger fabric of economic relations at the national and international levels. Focusing on Core-Based Statistical Areas (CBSAs) in the US, the paper identifies firms' subsidiary networks across space and their changes over time. These networks form a basic architecture through which important growth impulses in production and innovation are transmitted that impact urban income levels. Using a balanced panel of U.S. CBSAs with LexisNexis Corporate Affiliations data from 1993 until 2017, we develop a model that examines the relationship between national and international connectivity and urban income levels, differentiated by origin/destination of ties, industrial sectors, and various interaction effects. Our results strongly support that linkages at both the national and international scale (particularly linkages with European locations) are significantly related to urban-regional income development.