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| Author: | Ekholm, K. Hakkala, K. |
| Title: | Location of R&D and high-tech production by vertically integrated multinationals |
| Journal: | Economic Journal
2007 : MAR, VOL. 117:518, p. 512-548 |
| Index terms: | high technology multinational companies R&D vertical integration |
| Language: | eng |
| Abstract: | The paper extends the theory of multinational companies by allowing for agglomeration forces in company-level activities such as R&D as well as production. The study develops a two-country general-equilibrium model where companies make separate choices about the location of R&D and production. There are R&D spillovers and a home-market effect creating incentives for companies to locate production in the relatively large market. For relatively weak R&D spillovers and intermediate trade costs, the smaller economy tends to specialize in R&D. While skilled labour may gain from hosting an agglomeration of R&D activities, unskilled labour. |
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