Labour Pooling in R&D Intensive Industries

Konrad Stahl, Heiko Gerlach and Rønde, Thomas

No 5285, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We investigate firms' incentives to locate in the same region to gain access to a large pool of skilled labour. Firms engage in risky R&D activities and thus create stochastic product and implied labour 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 labour productivity is higher and firms choose a more efficient, technically diversified portfolio of R&D projects at the industry level.

Keywords: Agglomeration; Labour pooling; R&d (search for similar items in EconPapers)
JEL-codes: L13 O32 R12 (search for similar items in EconPapers)
Date: 2005-11
New Economics Papers: this item is included in nep-bec, nep-ino and nep-mic
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Labor pooling in R&D intensive industries (2009)
Working Paper: Labor Pooling in R&D Intensive Industries (2005)
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