Garcia Pires, Armando J. - In: Journal of Urban Economics 74 (2013) C, pp. 47-58
In a standard imperfect competition model, we endogenize the costs of production of firms in the increasing returns sector (IRS) via process R&D. We show that firms in the larger region in terms of demand invest more in R&D (i.e.: they are bigger in size and have lower marginal costs) than firms...