New ideas need new space

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Rodríguez, Diego. New ideas need new space. 1999
To cite or link this document: Rodríguez, Diego
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa 1999-05-01
dc.description.abstract We develop a setting with weak intellectual property rights, where firms' boundaries, location and knowledge spillovers are endogenous. We have two main results. The first one is that, if communication costs increase with distance, entrepreneurs concerned about information leakage have a benefit from locating away from the industry center: distance is an obstacle to collusive trades between members and non-members. The second result is that we identify a trade-off for the entrepreneur between owning a facility (controlling all its characteristics) and sharing a facility with a {\it non-member} (an agent not involved in production), therefore losing control over some of its characteristics. We focus on ``location" as the relevant characteristic of the facility, but location can be used as a spatial metaphor for other relevant characteristics of the facility. For the entrepreneur, sharing the facility with non-members implies that the latter, as co-owners, know the location (even if they do not have access to it). Knowledge of the location for the co-owners facilitates collusion with employees, what increases leakage. The model yields a benefit for new plants from spatial dispersion (locating at the periphery of the industry), particularly so for new plants of new firms. We relate this result with recent empirical findings on the dynamics of industry location.
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 390
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.title New ideas need new space
dc.type info:eu-repo/semantics/workingPaper 2016-06-04T02:50:26Z
dc.subject.keyword Microeconomics
dc.subject.keyword intellectual property rights
dc.subject.keyword employee hold-up
dc.subject.keyword secrecy
dc.subject.keyword location
dc.subject.keyword endogenous spillovers
dc.rights.accessRights info:eu-repo/semantics/openAccess

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