Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/176970
Authors: 
Aloi, Marta
Poyago-Theotoky, Joanna
Tournemaine, Frederic
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper 6951
Abstract: 
We analyse how spatial disparities in innovation activities, coupled with migration costs, affect economic geography, growth and regional inequality. We provide conditions for existence and uniqueness of a spatial equilibrium, and for the endogenous emergence of industry clusters. Spatial variations in knowledge spillovers lead to spatial concentration of more innovative firms. Migration costs, however, limit the concentration of economic activities in the most productive region. Narrowing the gap in knowledge spillovers across regions raises growth, and reduces regional inequality by making firms more sensitive to wage differentials. The associated change in the spatial concentration of industries has positive welfare effects.
Subjects: 
growth
economic geography
geographic labour mobility
innovation
knowledge spillovers
regional economics
JEL: 
O41
O31
L13
J61
R32
Document Type: 
Working Paper
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