Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93753
Authors: 
Gerlach, Heiko
Rønde, Thomas
Stahl, Konrad O.
Year of Publication: 
2005
Series/Report no.: 
SFB/TR 15 Discussion Paper 64
Abstract: 
We investigate firms' incentives to locate in the same region to gain access to a large pool of skilled labor. Firms engage in risky R&D activities and thus create stochastic product and implied labor demand. Agglomeration in a cluster 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 cluster, they tend to invest more and take more risk in R&D compared to spatially dispersed firms. Agglomeration is welfare maximizing, because expected labor productivity is higher and firms choose a more effcient, technically diversified portfolio of R&D projects at the industry level.
JEL: 
L13
O32
R12
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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