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High-tech clusters, technology spillovers, and trade secret laws

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Author Info
Fosfuri, Andrea (Universidad Carlos III de Madrid)
Rønde, Thomas (University of Mannheim)
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.

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File URL: http://openarchive.cbs.dk/cbsweb/handle/10398/6784
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Publisher Info
Paper provided by Copenhagen Business School, Department of Economics in its series Working Papers with number 07-2002.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 22 pages
Date of creation: 01 May 2002
Date of revision:
Handle: RePEc:hhs:cbsnow:2002_007

Contact details of provider:
Postal: Department of Economics, Copenhagen Business School, Solbjerg Plads 3 C, 5. sal, DK-2000 Frederiksberg, Denmark
Phone: 38 15 25 75
Fax: 38 15 26 65
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Web page: http://www.cbs.dk/departments/econ/
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Related research
Keywords: Cumulative innovation; industrial districts; intellectual property rights; technology spillovers;

Find related papers by JEL classification:
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
K20 - Law and Economics - - Regulation and Business Law - - - General
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights

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References listed on IDEAS
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  1. Ariel Pakes & Shmuel Nitzan, 1982. "Optimum Contracts for Research Personnel, Research Employment, and the Establishment of "Rival" Enterprises," NBER Working Papers 0871, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Hans Gersbach & Armin Schmutzler, 1999. "Endogenous Spillovers and Incentives to Innovate," Working Papers 9902, University of Zurich, Socioeconomic Institute.
    Other versions:
  3. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June. [Downloadable!] (restricted)
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    Other versions:
  5. Motta, Massimo & Rønde, Thomas, 2002. "Trade Secret Laws, Labour Mobility and Innovations," CEPR Discussion Papers 3615, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. Cheung, Steven N S, 1982. "Property Rights in Trade Secrets," Economic Inquiry, Oxford University Press, vol. 20(1), pages 40-53, January.
  7. James Bessen & Eric Maskin, 2006. "Sequential Innovation, Patents, and Imitation," Economics Working Papers 0025, Institute for Advanced Study, School of Social Science. [Downloadable!]
    Other versions:
  8. Combes, Pierre-Philippe & Duranton, Gilles, 2006. "Labour pooling, labour poaching, and spatial clustering," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 1-28, January. [Downloadable!] (restricted)
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  9. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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  10. Acs, Zoltan J & Audretsch, David B & Feldman, Maryann P, 1994. "R&D Spillovers and Recipient Firm Size," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 336-40, May. [Downloadable!] (restricted)
  11. Scotchmer, Suzanne, 1991. "Standing on the Shoulders of Giants: Cumulative Research and the Patent Law," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 29-41, Winter. [Downloadable!] (restricted)
  12. Thomas Rønde, 2001. "Trade Secrets and Information Sharing," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 10(3), pages 391-417, 09. [Downloadable!] (restricted)
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