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http://hdl.handle.net/10419/25677
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| Title: | | Agglomeration and endogenous absorptive capacities: hotelling revisited  |
| Authors: | | Hussler, Caroline Lorentz, André Rondé, Patrick |
| Issue Date: | | 2007 |
| Series/Report no.: | | Jena economic research papers 2007,102 |
| Abstract: | | This paper proposes a theoretical model of spatial duopoly, where the location, on the one hand, and the absorptive capacity of rms as function of their internal R&D investment, on the other hand, endogenously determine the maximum level of knowledge spillovers rms might absorb. Our goal is to test whether this new modelling of spillovers a ects the traditional outcomes in terms of rms location choices . We solve a three-stage game, where rms choose their geo- graphical location, prior to their level of internal R&D expenditures, and nally compete in prices. We found that, at the optimum, rms choose the same level of internal R&D and set the same price, inde- pendently of their location. Moreover, rms locate symmetrically and tends to agglomerate in the center of the market as the transportation costs increase, knowledge spillovers being in that case maximum. |
| Subjects: | | spatial agglomeration endogenous spillovers absorptive capacity non-cooperative game |
| JEL: | | O33 R12 L13 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Jena Economic Research Papers, MPI für Ökonomik
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