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

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Author Info

  • Andrea Fosfuri

    (Universidad Carlos III de Madrid)

  • Thomas Rønde

    (Copenhagen Business School)

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    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) the growth potential of an industry is high; 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. Trade secret protection based on punitive damages is, except in some extreme cases, beneficial for firms’ profits, stimulates clustering, and is not an impediment to technology spillovers.

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    File URL: http://www.econ.ku.dk/cie/dp/dp_2003-2006/2003-02.pdf/
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    Bibliographic Info

    Paper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 2003-02.

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    Length: 33 pages
    Date of creation: Mar 2003
    Date of revision:
    Handle: RePEc:kud:kuieci:2003-02

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    Related research

    Keywords: cumulative innovation; industrial districts; intellectual property rights; technology spillovers;

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    Cited by:
    1. Fosfuri, Andrea & Rønde, Thomas, 2003. "High-Tech Clusters, Technology Spillovers and Trade Secret Laws," CEPR Discussion Papers 4130, C.E.P.R. Discussion Papers.
    2. Fosfuri, Andrea & Ronde, Thomas, 2004. "High-tech clusters, technology spillovers, and trade secret laws," International Journal of Industrial Organization, Elsevier, vol. 22(1), pages 45-65, January.

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