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R&D and the agglomeration of industries

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  • Jan Kranich

    (Leuphana Universität Lüneburg)

Abstract

This paper discusses a model of the New Economic Geography, in which the seminal core-periphery model of Krugman (1991) is extended by endogenous research activities. Beyond the common ’anonymous’ consideration of R&D expenditures within fixed costs, this model introduces vertical product differentiation, which requires services provided by an additional R&D sector. In the context of international factor mobility, the destabilizing effects of a mobile scientific workforce are analyzed. In combination with a welfare analysis and a consideration of R&D promoting policy instruments and their spatial implications, this paper makes a contribution to the so-called brain drain debate.

Suggested Citation

  • Jan Kranich, 2008. "R&D and the agglomeration of industries," Working Paper Series in Economics 83, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:83
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    R&D; New Economic Geography; Vertical Differentiation;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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