Micro foundations for knowledge spillovers in spatial equilibrium models
Knowledge spillovers have recently been analysed by Barde (2009) and Ostbye (2010) in a spatial general equilibrium framework. Both studies lack explicit micro foundations for the spillovers â€šÃ„Ã¬ spillovers just take place and depend on firm density. The models must therefore be seen as reduced forms that may potentially be consistent with several structural interpretations. In this paper, the aim is to go some way in offering plausible micro foundations. We consider two alternatives: knowledge dissemination through knowledge embodied in labour moving between firms following Combes and Duranton (2006) and knowledge creation and dissemination through research and development (R&D) following dâ€šÃ„Ã´AsprâˆšÂ©mont and Jacquemin (1988).
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- Scotchmer, Suzanne & Thisse, Jacques-Francois, 1992. "Space and Competition: A Puzzle," The Annals of Regional Science, Springer, vol. 26(3), pages 269-86, September.
- Rivera-Batiz, Francisco L., 1988. "Increasing returns, monopolistic competition, and agglomeration economies in consumption and production," Regional Science and Urban Economics, Elsevier, vol. 18(1), pages 125-153, February.
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