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Location of R&D and High-Tech Production by Vertically Integrated Multinationals
The paper presents evidence that in Europe, production of high-tech goods is attracted to large markets, while research and development (R&D) activities tend to be located away from them. In order to explain this phenomenon, the authors develop a two-country general equilibrium model where firms make separate choices about the location of R&D and high-tech production.
http://d.repec.org/n?u=RePEc:hhs:iuiwop:0616&r=all