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Endogenous R&D Spillovers and Locational Choice

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  • Claudio Piga
  • Joanna Poyago-Theotoky

Abstract

We present a three-stage game where two firms choose location, R&D and price, under the assumption that R&D spillovers depend on firms' location. That is, the closer firms are to each other, the greater the benefit they receive from their rivals' efforts in quality-enhancing R&D. We show that the distance between firms' location increases with the degree of product differentiation. Further, we find that minimal quality differentiation always occurs. Finally, investment in R&D is positively associated with the degree of product differentiation

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Bibliographic Info

Paper provided by Centre for Research into Industry, Enterprise, Finance and the Firm in its series CRIEFF Discussion Papers with number 0310.

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Date of creation: Oct 2003
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Handle: RePEc:san:crieff:0310

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Keywords: Endogenous spillovers; Quality-enhancing R&D; Location.;

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Cited by:
  1. Maria Alipranti & Emmanuel Petrakis, 2012. "Comparative Advertising in Markets with Network Externalities," Working Papers 1306, University of Crete, Department of Economics, revised 08 May 2013.
  2. Marco Alderighi & Claudio A. Piga, 2007. "Why Should a Firm Choose to Limit the Size of its Market Area?," Discussion Paper Series 2007_21, Department of Economics, Loughborough University, revised Aug 2007.
  3. Constantine Manasakis & Emmanuel Petrakis, 2009. "Union structure and firms' incentives for cooperative R&D investments," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 665-693, May.
  4. Deltas, George & Karkalakos, Sotiris, 2007. "Similarity Of R&D Activities, Physical Proximity, and The Extent Of R&D Spillovers," MPRA Paper 45962, University Library of Munich, Germany.
  5. Luca Lambertini & Francesca Lotti & Enrico Santarelli, 2004. "Infra-industry spillovers and R&D cooperation: Theory and evidence," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(4), pages 311-328.
  6. G. Medda & C. Piga, 2004. "R&S e spillover industriali: un'analisi sulle imprese italiane," Working Paper CRENoS 200406, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  7. OA. Carboni, 2012. "A Spatial Analysis of R&D: the Role of Industry Proximity," Working Paper CRENoS 201204, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  8. Marie-Laure CABON-DHERSIN & Rim LAHMANDI-AYED, 2011. "R&D Organization: Cooperation or Cross-Licensing?," Discussion Papers (REL - Recherches Economiques de Louvain) 2011012, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  9. Eren Inci, 2009. "R&D tax incentives: a reappraisal," International Tax and Public Finance, Springer, vol. 16(6), pages 797-821, December.
  10. Constantine Manasakis & Dusanee Kesavayuth & Vasileios Zikos, 2012. "Upstream R&D networks," Working Papers 1201, University of Crete, Department of Economics.
  11. Bacchiega, Emanuele & Randon, Emanuela & Zirulia, Lorenzo, 2012. "Strategic accessibility competition," Research in Economics, Elsevier, vol. 66(2), pages 195-212.
  12. Lacetera, Nicola & Zirulia, Lorenzo, 2012. "Individual preferences, organization, and competition in a model of R&D incentive provision," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 550-570.
  13. Noriaki Matsushima & Koki Arai & Ikuo Ishibashi & Fumio Sensui, 2011. "The effects of non-assertion of patents provisions: R&D incentives in vertical relationships," ISER Discussion Paper 0807, Institute of Social and Economic Research, Osaka University.
  14. Claudio A. Piga & Giuseppe Medda, 2007. "Technological Spillovers and Productivity in Italian Manufacturing Firms," Working Paper Series 08-07, The Rimini Centre for Economic Analysis, revised Jul 2007.
  15. Burr, Chrystie & Knauff, Malgorzata & Stepanova, Anna, 2013. "On the prisoner’s dilemma in R&D with input spillovers and incentives for R&D cooperation," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 254-261.
  16. Li, Changying & Zhang, Jianhu, 2011. "Equilibrium locations in a mixed duopoly with sequential entry in real time," Economic Modelling, Elsevier, vol. 28(3), pages 1211-1218, May.
  17. Narajabad, Borghan & Watson, Randal, 2011. "The dynamics of innovation and horizontal differentiation," Journal of Economic Dynamics and Control, Elsevier, vol. 35(6), pages 825-842, June.
  18. Yang, Chih-Hai & Lin, Hui-Lin & Li, Hsiao-Yun, 2013. "Influences of production and R&D agglomeration on productivity: Evidence from Chinese electronics firms," China Economic Review, Elsevier, vol. 27(C), pages 162-178.

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