High-tech clusters, technology spillovers, and trade secret laws
AbstractWe 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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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Industrial Economics in its series CIE Discussion Papers with number 2003-02.
Length: 33 pages
Date of creation: Mar 2003
Date of revision:
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cumulative innovation; industrial districts; intellectual property rights; technology spillovers;
Find related papers by JEL classification:
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- K2 - Law and Economics - - Regulation and Business Law
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-05-08 (All new papers)
- NEP-COM-2003-05-08 (Industrial Competition)
- NEP-GEO-2003-05-08 (Economic Geography)
- NEP-INO-2003-05-08 (Innovation)
- NEP-LAW-2003-05-08 (Law & Economics)
- NEP-URE-2003-05-08 (Urban & Real Estate Economics)
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- Fosfuri, Andrea & Rønde, Thomas, 2003. "High-Tech Clusters, Technology Spillovers and Trade Secret Laws," CEPR Discussion Papers 4130, C.E.P.R. Discussion Papers.
- 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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