An analytical framework for the spatial and sequential decision processes of knowledge-oriented firms is presented, in which each firm is oligopolistically competing with other firms on the basis of inventive activities. The location behavior of new entrants is described as a two-stage decision process: (a) choosing the region in which to produce, and (b) determining the optimal level of output and the combination of inputs to produce. A hierarchical game-like framework is an essential part of the model. Both timing and intensity are major decision variables for the public provision of knowledge infrastructure. Numerical examples illustrate some implications for knowledge-based regional development policies.
This is a preview of subscription content, access via your institution.
Adams, J. D. 1990. Fundamental stocks of knowledge and productivity growth.Journal of Political Economy 98: 673–702.
Batten, D. F., Kobayashi, K., and Andersson, Å. E. 1989. Knowledge, nodes and networks: an analytical perspective. InKnowledge and industrial organization, eds. Å. E. Andersson, D. F. Batten, and C. Karlsson, pp. 31–46. Heidelberg, Germany: Springer Verlag.
Cornes, R., and Sandler, T. 1986.The theory of externalities, public goods and club goods. Cambridge, UK: Cambridge University Press.
Dasgupta, P., and Stiglitz, J. E. 1980. Industrial structure and the nature of innovation activity.Economic Journal 90: 266–93.
Eaton, B., and Lipsey, R. 1978. Freedom of entry and the existence of price profit.Economic Journal 88: 455–66.
Eaton, B., and Lipsey, R. 1979. The theory of market pre-emption: the persistence of excess capacity and monopoly in growing spatial markets.Econometrica 47: 149–58.
Eaton, B., and Wooders, M. 1985. Sophisticated entry in a model of spatial competition.Rand Journal of Economics 16: 282–97.
Evenson, R. E., and Kislev, Y. 1975.Agricultural research and productivity. New Haven, Connecticut: Yale University Press.
Hay, D. 1976. Sequential entry and entry deterring strategies in spatial competition.Oxford Economic Papers 28: 240–57.
Hotelling, H. 1929. Stability in competition.Economic Journal 39: 41–57.
Lane, W. 1980. Product differentiation in a model with endogenous sequential entry.Bell Journal of Economics 12: 237–60.
Mansfield, E. 1968.Industrial research and technological change. New York: Norton.
Mansfield, E., Rapoport, J., Schnee, J., Wagner, S., and Hamburger, M. 1971.Research and innovation in the modern corporation. New York: Norton.
Marshall, A. 1920.Principles of economics. 8th edition. London: Macmillan and Co., Ltd.
Nash, J. 1951. Non-cooperative games.Annals of Mathematica 54: 286–95.
Nelson, R. R., Peck, M. J., and Kalachek, E. D. 1967.Technology, economic growth and public policy. Washington, DC: Brookings Institution.
Novshek, W. 1980. Equilibrium in simple spatial (or differentiated product) models.Journal of Economic Theory 28: 243–55.
Prescott, E., and Visscher, M. 1977. Sequential location among firms with foresight.Bell Journal of Economics 8: 378–93.
Romer, P. M. 1986. Increasing returns and long-run growth.Journal of Political Economy 94: 1002–37.
Romer, P. M. 1990. Endogenous technological change.Journal of Political Economy 98: 71–102.
Scherer, F. M. 1980.Industrial market structure and economic performance. 2d edition. Boston: Houghton Mifflin.
Schumpeter, J. A. 1942.Capitalism, socialism and democracy. New York: Harper.
Stiglitz, J. E., and Mathewson, G. F., eds. 1986.New developments in the analysis of market structure. Hampshire, UK: The Macmillan Press Ltd.
Varian, H. 1979.Microeconomic analysis. New York: Norton.
About this article
Cite this article
Kobayashi, K., Batten, D.F. & Andersson, Å.E. The sequential location of knowledge-oriented firms over time and space. Papers in Regional Science 70, 381–397 (1991). https://doi.org/10.1007/BF01434595
- Decision Process
- Decision Variable
- Optimal Level
- Development Policy
- Analytical Framework