Essays In Spatial Economics

Author : Yoko Takeda
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (11 download)

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Download or read book Essays on International and Spatial Economics written by Yoko Takeda and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three independent chapters on International and Spatial Economics. The first chapter analyzes the spatial sorting pattern of innovative activities by developing a model of heterogeneous firms that choose innovation sourcing sites. The model captures firms' trade-off that locating innovations in larger-sized cities enhances knowledge spillover while it also exposes the higher risk of information leakage to competitors, with implying that the relevance between cost and benefit of sourcing innovation in a populous city depends on the life-cycle length of technology embedded in products. In industries with relatively rapid turn-over of technologies, firms become less sensitive to the risk of information leakage as their fast technology obsolescence tends to outpace adoption of leaked information by competitors. In contrast, firms using more durable technologies evaluate the risk of information leakage relatively more, as leaked information retains long-lasting market value. As a result, the model predicts a geographical sorting pattern of innovation where firms using long-lived technology in production optimally source innovation in smaller-sized cities, and vice versa. The empirical analysis based on U.S. patent data shows that the theory partly explains within-firm heterogeneity of innovation sourcing decision by multi-product firms operating in multiple industries, although there exist considerable across-firm variations in geography choice for innovation that the model cannot account for. The second chapter provides evidence that offshore patent laws influence global firms' innovation decisions. Within a simple model of multinational production, we find that a novel consequence of imitation risk is that firms innovate selectively, directing investments in product development toward relatively short-lived varieties that are difficult to imitate prior to obsolescence. A key implication of firms' selective product development is that patent reforms tend to increase not only innovation by firms, but also the average economic lifetime of the products they develop---both to extents varying non-monotonically across industries according to rates of underlying technological obsolescence. Using detailed data on U.S. patent grants and citations during 1976--2006 and U.S. multinational firms' affiliate innovation investment during 1982--2009, we find empirical regularities consistent with these hypotheses. The third chapter analyzes the intellectual property rights (IPR)-protecting policy in developing countries by constructing a North-South model where the North firms serve the South market through either export or foreign direct investment (FDI). The FDI leads to a technology leakage to local firms in the South via imitation, which imposes the North firm a trade-off in conducting FDI between a benefit of saving production and transportation cost and a cost of tightened competition due to advanced technology adoption by the South firms. IPR protection level in the South determines actual cost of technology leakage incurred by the North firm, and the model concludes that the South government has an incentive to set the loosest possible IPR-protection policy that attracts FDI to the South. This result holds for extended environments of the model.