Where Do Firms Choose to Locate Their R&D? A Spatial Conditional Logit Analysis on French Data

ABSTRACT The purpose of this paper is to empirically investigate how regional advantages and firms characteristics influence the location of R&D. Looking at 2024 decisions of R&D lab locations in France, an extended conditional logit is implemented with spatially lagged explanatory variables to evaluate the importance of each factor and to test the spatial dimension of knowledge spillovers. The results indicate that a large market size, a large amount of ideas, and a low level of competition in the target region increases the probability of setting up R&D labs while the diffusion of knowledge across regions induces a significant spatial dependence.

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