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Proximity and R&D Cooperation Between Firms: Location, R&D and Output in an Oligopoly with Spillovers
This paper aims at explaining how proximity between firms affects cooperation in R&D. For that purpose, it is proposed a three-stage game amongst three firms where each firm decides about location, R&D and output. Firms’ decision about location determines a R&D spillover, which is inversely related to the distance between firms.
Link
http://www.ersa.org/ersaconfs/ersa04/PDF/177.pdf