Labor Pooling in R&D Intensive Industries
AbstractWe investigate firmsâ€™ incentives to locate in the same region to gain access to a large pool of skilled labor. Firms engage in risky R&D activities and thus create stochastic product and implied labor demand. Agglomeration in a cluster is more likely in situations where the innovation step is large and the probability for a firm to be the only innovator is high. When firms cluster, they tend to invest more and take more risk in R&D compared to spatially dispersed firms. Agglomeration is welfare maximizing, because expected labor productivity is higher and firms choose a more effcient, technically diversified portfolio of R&D projects at the industry level.
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Bibliographic InfoPaper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 64.
Date of creation: Sep 2005
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Other versions of this item:
- Gerlach, Heiko A. & Rønde, Thomas & Stahl, Konrad O., 2005. "Labour Pooling in R&D Intensive Industries," CEPR Discussion Papers 5285, C.E.P.R. Discussion Papers.
- Heiko A. Gerlach & Thomas Rønde & Konrad Stahl, 2005. "Labor Pooling in R&D Intensive Industries," CIE Discussion Papers 2005-01, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-11-05 (All new papers)
- NEP-INO-2005-11-05 (Innovation)
- NEP-MIC-2005-11-05 (Microeconomics)
- NEP-TID-2005-11-05 (Technology & Industrial Dynamics)
- NEP-URE-2005-11-05 (Urban & Real Estate Economics)
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