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The effect of vertical knowledge spillovers via the supply chain on location decision of firms

Mohammad Ali Kashefi ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper a game theoretic model is employed to analyze the relationship between strategic location decision of firms in the supply chain considering the role of horizontal and vertical knowledge spillovers, and numerical approach is applied to characterize the equilibria of the considered multi-stage game. Geographical concentration or isolation as equilibrium outcome is determined based on our different parameterizations and two scenarios each consists of two separated cases, which we establish according to the location of our agents. In the first scenario both suppliers are supposed to be located in different regions while in the second one they act in a same region. In addition, first case of each scenario considers geographical isolation of two producers whereas second case investigates the geographical concentration. Furthermore, the effect of different technological level of our agents on their final location decision is investigated.

Keywords: Strategic Firm Location; Knowledge Spillover; Geographical Concentration; Supply Chain (search for similar items in EconPapers)
JEL-codes: R30 L13 C88 C61 D83 C72 (search for similar items in EconPapers)
Date: 2011-05-01, Revised 2011-05-20
New Economics Papers: this item is included in nep-com, nep-cse, nep-geo, nep-knm and nep-ure
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