Location of R&D and High-Tech Production by Vertically-Integrated Multinationals

Karolina Ekholm () and Katariina Nilsson Hakkala

No 4078, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: 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.

Keywords: Monopolistic competition; R&d; High-tech production; Agglomeration economies (search for similar items in EconPapers)
JEL-codes: F12 F23 (search for similar items in EconPapers)
Date: 2003-10
New Economics Papers: this item is included in nep-ino and nep-tid
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Related works:
Journal Article: Location of R&D and High-Tech Production by Vertically Integrated Multinationals (2007)
Working Paper: Location of R&D and High-Tech Production by Vertically Integrated Multinationals (2004)
Working Paper: Location of R&D and High-Tech Production by Vertically Integrated Multinationals (2003)
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