We study a situation in which an R&D department promotes the introduction of an innovation that results in costly re-adjustments for production workers. In response, the production department tries to resist change by improving the existing technology. Resistance to change triggers competition...

We question the widespread argument that firms embarking on foreign direct investments must possess some specific advantages to offset the penalties of operating across national and cultural boundaries. A simple model shows that firms might invest abroad to capture local advantages through...

We analyse firms’ incentives to cluster in an industrial district to benefit from reciprocal technology spillovers. A simple model of cumulative innovation is presented where technology spillovers arise endogenously through labour mobility. It is shown that firms’ incentives to cluster are...

We examine how knowledge‐intensive firms modify their organizational knowledge bases in the context of mobility of researchers. Building on a dynamic capabilities perspective, we propose a conceptual model of firm knowledge base dynamics that clearly distinguishes between two mechanisms: (1)...