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Title:The formation of urban centers under R&D and spillover externalities PDF Logo
Authors:Kranich, Jan
Issue Date:2009
Series/Report no.:Discussion papers // School of Economics and Management of the Hanover Leibniz University 430
Abstract:This paper proposes a model of urban agglomeration in conjunction with imperfect competition and endogenous product R&D of firms. The quality of differentiated manufacturing goods is a result of R&D services provided by research firms. Sectoral interactions are subject to spatially dependent transaction costs and (knowledge) spillover externalities. The paper analyzes the existence of fundamental city patterns with respect to R&D intensity and the degree of localization in knowledge production. The model features three equilibrium formations: a monocentric, a mixed, and a perfectly integrated pattern, whereas the R&D intensity always increases towards the city center. However, product quality and the corresponding R&D expenditures of firms are not necessarily increasing with the city size; a result, which also renders decisive implications of local innovation policy.
Subjects:Bid-rent
Land Use
R&D
Externalities
JEL:R1
R14
Document Type:Working Paper
Appears in Collections:Diskussionspapiere, Wirtschaftswissenschaftliche Fakultät, Universität Hannover

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