Abstract

We provide a network game to analyze the innovation network structure by incorporating endogenous R&D spillovers and diffusion effects, reconciling the limited types of innovation alliance in practice. In our network model, enterprises can actively choose to invest in R&D or establish links with others to absorb R&D spillovers. We characterize the network structure of enterprises' strategic R&D decisions in different types of spatial equilibrium. We further extend the theoretical framework to generate industry-specific implications under cooperative R&D, location choice, spatial agglomeration, and social capital allocation in innovation networks.

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