R&D Spillovers on a Salop Circle |
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Authors: | Fabio Lamantia Mario Pezzino |
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Institution: | 1. Department of Economics, Statistics and Finance, University of Calabria, Italy;2. School of Social Sciences, University of Manchester, UK |
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Abstract: | The paper describes quality/price equilibrium and welfare effects of R&D spillovers when firms are located around the circumference of a Salop circle, and the extent of the spillovers may depend on the geographic proximity between firms. In particular, we show that an increase in competition may have a positive effect on the provision of quality and firms' profits. We also extend the model allowing a multinational enterprise to locate at the centre of the circle. In this scenario it is important to understand the interplay of local R&D spillovers with the spillovers that propagate from and to the centre. Copyright © 2015 John Wiley & Sons, Ltd. |
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