Labor Pooling in R&D Intensive Industries

Heiko Gerlach, Thomas Rønde and Konrad Stahl
Additional contact information
Thomas Rønde: Department of Economics, University of Copenhagen
Konrad Stahl: University of Mannheim

No 2005-01, CIE Discussion Papers from University of Copenhagen. Department of Economics. Centre for Industrial Economics

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 efficient, technically diversified portfolio of R&D projects at the industry level.

JEL-codes: L13 O32 R12 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2005-09
New Economics Papers: this item is included in nep-ino
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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