English, Article, Journal or magazine article edition: Agglomeration and Endogenous Absorptive Capacities: Hotelling Revisited Caroline Hussler; Andre Lorentz; Patrick Ronde

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Bookmark: http://trove.nla.gov.au/version/973
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Agglomeration and Endogenous Absorptive Capacities: Hotelling Revisited
Author
  • Caroline Hussler
  • Andre Lorentz
  • Patrick Ronde
Physical Description
  • preprint
Notes
  • This paper proposes a theoretical model of spatial duopoly, where the location, on the one hand, and the absorptive capacity of ï¬rms as function of their internal R+D investment, on the other hand, endogenously determine the maximum level of knowledge spillovers ï¬rms might absorb. Our goal is to test whether this new modelling of spillovers affects the traditional outcomes in terms of ï¬rms location choices . We solve a three-stage game, where ï¬rms choose their geographical location, prior to their level of internal R+D expenditures, and ï¬nally compete in prices. We found that, at the optimum, ï¬rms choose the same level of internal R+D and set the same price, independently of their location. Moreover, ï¬rms locate symmetrically and tends to agglomerate in the center of the market as the transportation costs increase, knowledge spillovers being in that case maximum.
  • Spatial Agglomeration, Endogenous Spillovers, Absorptive Capacity, Non-Cooperative Game
  • RePEc:jrp:jrpwrp:2007-102
Language
  • English
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