Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/27552
Authors: 
Gerlach, Heiko A.
Rønde, Thomas
Stahl, Konrad O.
Year of Publication: 
2008
Series/Report no.: 
ZEW Discussion Papers 08-074
Abstract: 
We investigate the interplay between firms' R&D decisions and labor market competition, and how this influences equilibrium location choices and welfare. Firms engage in risky R&D activities and thus create stochastic product and implied labor demand. Spatial agglomeration is more likely in situations where the innovation step is large and the probability for a firm to be the only innovator is high. When firms agglomerate, they tend to invest more in R&D compared to spatially dispersed firms. Agglomeration is welfare maximizing, because expected labor productivity is higher and firms choose a more efficient, diversified portfolio of R&D projects at the industry level. The latter aspect is ascertained by data from German firms in R&D intensive industries.
JEL: 
R12
O32
L13
Document Type: 
Working Paper

Files in This Item:
File
Size
452.6 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.