Article (Scientific journals)
The spatial selection of heterogeneous firms
Okubo, Toshihiro; PICARD, Pierre M.; Thisse, Jacques-François
2010In Journal of International Economics, 82 (2), p. 230-237
Peer reviewed


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Keywords :
firm heterogeneity; spatial selection; trade liberalization
Abstract :
[en] Empirical research on strategic alliances has focused on the idea that alliance partners are selected on the basis of social capital considerations. In this paper we emphasize instead the role of complementary knowledge stocks (broadly defined) in partner selection, arguing not only that knowledge complementarity should not be overlooked, but that it may be the true causal force behind alliance formation. To marshal evidence on this point, we design a simple model of partner selection in which firms ally for the purpose of learning and innovating, and in doing so create an industry network. We abstract completely from network-based structural and strategic motives for partner selection and focus instead on the idea that firms’ knowledge bases must “fit” in order for joint leaning and innovation to be possible, and thus for an alliance to be feasible. The striking result is that while containing no social capital considerations, this simple model replicates the firm conduct, network structure, and contingent effects of network position on performance observed and discussed in the empirical literature.
Disciplines :
International economics
Author, co-author :
Okubo, Toshihiro
PICARD, Pierre M. ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
Thisse, Jacques-François
Language :
Title :
The spatial selection of heterogeneous firms
Publication date :
November 2010
Journal title :
Journal of International Economics
Publisher :
Elsevier Science
Volume :
Issue :
Pages :
Peer reviewed :
Peer reviewed
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