Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/208456
Authors: 
Fosfuri, Andrea
Rønde, Thomas
Year of Publication: 
2002
Series/Report no.: 
Working paper 7-2002
Abstract: 
We analyze firms’ incentives to cluster in an industrial district to benefit from reciprocal technology spillovers. A simple model of cumulative innovation is presented where technology spillovers arise endogenously through labor mobility. It is shown that firms’ incentives to cluster are the strongest when the following three conditions are met: 1) technological progress is rapid; 2) competition in the product market is relatively soft; 3) the probability of a single firm to develop an innovation is neither very high nor very low. We show that some trade secret protection is always beneficial for firms’ profits and stimulates clustering. Excessive protection may impede technology spillovers and reduce firms’ incentives to cluster.
Subjects: 
Cumulative innovation
industrial districts
intellectual property rights
technology spillovers
JEL: 
J30
K20
L10
O32
O34
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/3.0/
Document Type: 
Working Paper

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