Template-Type: ReDIF-Paper 1.0
Author-Name: Luca Colombo 
Author-X-Name-First: Luca 
Author-X-Name-Last: Colombo
Author-Email: lucava.colombo@unicatt.it
Author-Workplace-Name: Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore
Author-Name: Herbert Dawid 
Author-X-Name-First: Herbert 
Author-X-Name-Last: Dawid
Author-Email: hdawid@wiwi.uni-bielefeld.de
Author-Workplace-Name: Universität Bielefeld  
Title: Strategic Location Choice under Dynamic Oligopolistic Competition and Spillovers
Abstract: This paper investigates firms' optimal location choices explicitly accounting for the role of inwards and outwards knowledge spillovers in a dynamic Cournot oligopoly with firms that are heterogeneous in their ability to carry out cost-reducing R\&D. Firms can either locate in an industrial cluster or in isolation. Technological spillovers are exchanged between the firms in the cluster. It is shown that a technological leader has an incentive to locate in isolation only if her advantage exceeds a certain threshold, which is increasing in firms' discount rate, in industry dispersion, and in the intensity of knowledge spillovers. Scenarios are identified where although it is optimal for the technological leader to locate in isolation, from a welfare perspective it would be desirable that she locates in the cluster.
Length: 31
Creation-Date: 2013-11
File-URL: http://dipartimenti.unicatt.it/economia-finanza-def001.pdf
File-Format: Application/pdf
File-Function: First version, 2013
Number: def001
Classification-JEL: L13, C73, O31, R12
Keywords: Location Choice, Knowledge Spillovers, Technological Leadership, Markov-perfect Equilibrium
Handle: RePEc:ctc:serie1:def001