High-tech clusters, technology spillovers, and trade secret laws

Andrea Fosfuri and Thomas Rønde
Additional contact information
Andrea Fosfuri: Universidad Carlos III de Madrid
Thomas Rønde: Copenhagen Business School

No 2003-02, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

Abstract: We analyze firms’ incentives to cluster in an industrial district to benefit from reciprocal technology spillovers. A simple model of cumulative innovation is presented where technology spillovers arise endogenously through labor mobility. It is shown that firms’ incentives to cluster are the strongest when the following three conditions are met: 1) the growth potential of an industry is high; 2) competition in the product market is relatively soft; 3) the probability of a single firm to develop an innovation is neither very high nor very low. Trade secret protection based on punitive damages is, except in some extreme cases, beneficial for firms’ profits, stimulates clustering, and is not an impediment to technology spillovers.

Keywords: cumulative innovation; industrial districts; intellectual property rights; technology spillovers (search for similar items in EconPapers)
JEL-codes: J3 K2 L1 O32 O34 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2003-03
New Economics Papers: this item is included in nep-com, nep-geo, nep-ino, nep-law and nep-ure
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Citations: View citations in EconPapers (2)

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