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R&D and Strategic Industrial Location in International Oligopolies

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  • Garcia Pires, Armando José

Abstract

In a spatial economy where oligopolist firms compete in R&D, it is found that geography affects the innovative behaviour of firms. Notably, international differences in market size conduce to endogenous asymmetries between firms given that firms located in the country with more demand have stronger incentives to invest in R&D. This 'R&D linkage' between demand and competitiveness promotes firms to strategically delocalize to the larger country. As a result, a spatial equilibrium arises with only total or partial agglomeration, but never with symmetric dispersion.

Suggested Citation

  • Garcia Pires, Armando José, 2006. "R&D and Strategic Industrial Location in International Oligopolies," CEPR Discussion Papers 5582, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5582
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    References listed on IDEAS

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    More about this item

    Keywords

    agglomeration effects; asymmetric firms; industrial location; oligopoly; R&D investment;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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