R&D location in dynamic industry environments

Luca Colombo, Herbert Dawid and Philipp Harting

Journal of Economic Geography, 2024, vol. 24, issue 1, 41-62

Abstract: We study firms’ optimal R&D location strategies in a dynamic industry model with competition in product quality. In light of potential future inwards and outwards spillovers firms make their location choices relying on heuristic strategies that are based on the expected present values associated with alternative location patterns. Using a simulation analysis, we show how the strategies of innovators and imitators differ and how they depend on whether firms operate in strongly or weakly innovative industry environments. We also characterize how firms’ location choices should account for the innovativeness of the competitors active in a location.

Keywords: Location heuristic; knowledge spillovers; industry dynamics; innovation; imitation (search for similar items in EconPapers)
JEL-codes: C63 O32 R30 (search for similar items in EconPapers)
Date: 2024
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