R&D and the agglomeration of industries

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This paper discusses a model of the New Economic Geography, in which the seminal core-periphery model of Krugman (1991) is extended by endogenous research activities. Beyond the common ’anonymous’ consideration of R&D expenditures within fixed costs, this model introduces vertical product differentiation, which requires services provided by an additional R&D sector. In the context of international factor mobility, the destabilizing effects of a mobile scientific workforce are analyzed. In combination with a welfare analysis and a consideration of R&D promoting policy instruments and their spatial implications, this paper makes a contribution to the so-called brain drain debate.
Original languageEnglish
Place of PublicationLüneburg
PublisherInstitut für Volkswirtschaftslehre der Universität Lüneburg
Number of pages44
Publication statusPublished - 2008

    Research areas

  • Economics - R&D, New Economic Geography, Vertical differentiation

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