Endogenous R&D spillovers and locational choice

Claudio Piga; Joanna Poyago-Theotoky

doi:10.1016/j.regsciurbeco.2004.02.002

Endogenous R&D spillovers and locational choice

Claudio Piga, Joanna Poyago-Theotoky

Research output: Contribution to journal › Article › peer-review

70 Citations (Scopus)

Abstract

We present a three-stage game where two firms choose location, R&D and price, under the assumption that R&D spillovers depend on firms' location. That is, the closer firms are to each other, the greater the benefit they receive from their rivals' efforts in quality-enhancing R&D. We show that the distance between firms' location increases with the degree of product differentiation. Further, we find that minimal quality differentiation always occurs. Finally, investment in R&D is positively associated with the degree of product differentiation.

Original language	English
Pages (from-to)	127-139
Number of pages	13
Journal	Regional Science and Urban Economics
Volume	35
Issue number	2
DOIs	https://doi.org/10.1016/j.regsciurbeco.2004.02.002
Publication status	Published - 1 Mar 2005
Externally published	Yes

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AB - We present a three-stage game where two firms choose location, R&D and price, under the assumption that R&D spillovers depend on firms' location. That is, the closer firms are to each other, the greater the benefit they receive from their rivals' efforts in quality-enhancing R&D. We show that the distance between firms' location increases with the degree of product differentiation. Further, we find that minimal quality differentiation always occurs. Finally, investment in R&D is positively associated with the degree of product differentiation.

KW - Endogenous spillovers

KW - Location

KW - Quality-enhancing R&D

UR - https://www.scopus.com/pages/publications/15844403055

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DO - 10.1016/j.regsciurbeco.2004.02.002

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JO - Regional Science and Urban Economics

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IS - 2

ER -

Endogenous R&D spillovers and locational choice

Abstract

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