Labor Pooling in R&D Intensive Industries

Heiko Gerlach, Thomas Rønde and Konrad O. Stahl

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: We investigate firms’ incentives to locate in the same region to gain access to a large pool of skilled labor. Firms engage in risky R&D activities and thus create stochastic product and implied labor demand. Agglomeration in a cluster is more likely in situations where the innovation step is large and the probability for a firm to be the only innovator is high. When firms cluster, they tend to invest more and take more risk in R&D compared to spatially dispersed firms. Agglomeration is welfare maximizing, because expected labor productivity is higher and firms choose a more effcient, technically diversified portfolio of R&D projects at the industry level.

JEL-codes: L13 O32 R12 (search for similar items in EconPapers)
Date: 2005-09
New Economics Papers: this item is included in nep-ino, nep-mic, nep-tid and nep-ure
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https://epub.ub.uni-muenchen.de/13486/1/64.pdf (application/pdf)

Related works:
Journal Article: Labor pooling in R&D intensive industries (2009)
Working Paper: Labour Pooling in R&D Intensive Industries (2005)
Working Paper: Labor Pooling in R&D Intensive Industries (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:64

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