Location of R&D and high-tech production by vertically integrated multinationals

Arbeitspapier

We develop a two-country general equilibrium model where firms make separate choices about the location of R&D and high-tech production. There are two agglomeration forces: R&D spillovers and backward linkages associated with high-tech production. The latter tends to attract production to the larger economy. We show that, for relatively weak R&D spillovers and intermediate trade costs, the smaller economy tends to specialize in R&D. For certain parameterizations, both concentration and dispersion of R&D activities are possible outcomes. Hosting an agglomeration of R&D activities does not necessarily lead to welfare gains.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: SSE/EFI Working Paper Series in Economics and Finance ; No. 538

Classification and Topics

• Classification: Wirtschaft ; Models of Trade with Imperfect Competition and Scale Economies; Fragmentation ; Multinational Firms; International Business
• Subject: monopolistic competition ; R&D ; high-tech production ; agglomeration economies ; Monopolistischer Wettbewerb ; Hochtechnologiesektor ; Agglomerationseffekt ; Industrielle Forschung

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ekholm, Karolina ; Hakkala, Katariina
• Event: Veröffentlichung
• (who): Stockholm School of Economics, The Economic Research Institute (EFI)
• (where): Stockholm
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/56338
• Last update: 10.03.2025, 11:42 AM CET