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Why are technological spillovers spatially bounded? A market orientated approach


  • Baranes, Edmond
  • Tropeano, Jean-Philippe


According to empirical evidence, technological spillovers are spatially bounded. This is one of the main reasons why firms are induced to locate in close prox-imity despite tough competition. This paper is an attempt to endogenize such spillovers. For that purpose, we try to explain why spatial proximity gives more incentives to competing firms to share knowledge. We show that spatial proxim-ity is the best way for firms to prevent free-riding in case of knowledge sharing. Indeed, Þercer competition impedes free riding provided that such a behavior dampens firms efficiency and have a dramatic effect on profits. Moreover, our results have important implications for regional policy. We point out that a slight decrease in transport costs triggers spatial polarization which implies knowledge sharing and thereby enhances innovation. A more dramatic decrease in transport costs attains both the objectives of increasing innovation and regional equity.
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  • Baranes, Edmond & Tropeano, Jean-Philippe, 2003. "Why are technological spillovers spatially bounded? A market orientated approach," Regional Science and Urban Economics, Elsevier, vol. 33(4), pages 445-466, July.
  • Handle: RePEc:eee:regeco:v:33:y:2003:i:4:p:445-466

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    References listed on IDEAS

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    Cited by:

    1. Koji Nishikimi & Ikuo Kuroiwa, 2011. "Analytical Framework for East Asian Integration (1): Industrial Agglomeration and Concentrated Dispersion," Chapters,in: The Economics of East Asian Integration, chapter 2 Edward Elgar Publishing.
    2. Dafna Schwartz & Raphael Bar-El, 2006. "Venture Investments in Israel - A Regional Perspective Dafna Schwartz and Raphael Bar-El Ben-Gurion University, School of Management, Israel," ERSA conference papers ersa06p868, European Regional Science Association.
    3. Lee, Sang-Ho & Muminov, Timur, 2017. "R&D Output Sharing in a Mixed Duopoly and Incentive Subsidy Policy," MPRA Paper 81732, University Library of Munich, Germany.
    4. Jens K. Perret, 2010. "A Core-Periphery Pattern in Russia – Twin Peaks or a Rat’s Tail," EIIW Discussion paper disbei178, Universitätsbibliothek Wuppertal, University Library.
    5. Leppälä, Samuli, 2014. "Theoretical Perspectives on Localised Knowledge Spillovers and Agglomeration," Cardiff Economics Working Papers E2014/10, Cardiff University, Cardiff Business School, Economics Section.

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