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

Karolina Ekholm () and Katariina Nilsson Hakkala

Economic Journal, 2007, vol. 117, issue 518, 512-543

Abstract: This article extends the theory of multinational firms by allowing for agglomeration forces in firm-level activities such as R&D as well as in production. We develop a two-country general-equilibrium model where firms make separate choices about the location of R&D and production. There are R&D spillovers and a home-market effect creating incentives for firms to locate production in the relatively large market. For relatively weak R&D spillovers and intermediate trade costs, the smaller economy tends to specialise in R&D. While skilled labour may gain from hosting an agglomeration of R&D activities, unskilled labour Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.

Date: 2007
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Related works:
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)
Working Paper: Location of R&D and High-Tech Production by Vertically Integrated Multinationals (2003)
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