Kristy Buzard

The Geography of Research and Development Activity in the U.S.

This study details the location patterns of RD Rosenthal and Strange, 2001; and Duranton and Overman, 2005), the authors consider the spatial concentration of private R&D activity. Second, rather than focusing on the concentration of employment in a given industry, the authors look at the clustering of individual R&D labs by industry. Third, following Duranton and Overman (2005), the authors look for geographic clusters of labs that represent statistically significant departures from spatial randomness using simulation techniques. The authors find that R&D activity for most industries tends to be concentrated in the Northeast corridor, around the Great Lakes, in Californias Bay Area, and in southern California. They argue that the high spatial concentration of R&D activity facilitates the exchange of ideas among firms and aids in the creation of new goods and new ways of producing existing goods. They run a regression of an Ellison and Glaeser (1997) style index measuring the spatial concentration of R&D labs on geographic proxies for knowledge spillovers and other characteristics and find evidence that localized knowledge spillovers are important for innovative activity.

Self-Enforcing Trade Agreements, Dispute Settlement and Separation of Powers

In an environment where international trade agreements must be enforced via promises of future cooperation, the presence of an import-competing lobby has important implications for optimal punishments, and therefore dispute resolution procedures. When lobbies work to disrupt trade agreements, the optimal punishment must balance two, conflicting objectives. Longer punishments help to enforce cooperation by increasing the governments costs of defecting, but because the lobby prefers the punishment outcome, this also incentivizes lobbying effort and with it political pressure to break the agreement. Thus the model generates new predictions for the design of mechanisms for resolving trade disputes: within the class of Nash-reversion punishments, there is an optimal length for dispute resolutions procedures, and it depends directly on the political influence of the lobbies. Trade agreement tariffs are shown to be increasing in the political influence of the lobbies, as well as their patience levels.