Labor Pooling, Labor Poaching, and Spatial Clustering - Paris-Jourdan Sciences Économiques Access content directly
Journal Articles Regional Science and Urban Economics Year : 2006

Labor Pooling, Labor Poaching, and Spatial Clustering

Abstract

When firms cluster in the same local labour market, they face a trade-off between the benefits of labour pooling (i.e., access to workers whose knowledge help reduce costs) and the costs of labour poaching (i.e., loss of some key workers to competition and a higher wage bill to retain the others). We explore this tradeoff in a duopoly game. Depending on market size, on the degree of horizontal differentiation between goods, and on worker heterogeneity in terms of knowledge transfer cost, we characterise the strategic choices of firms regarding locations, wages, poaching and prices. Our results show that co-location, although it is always efficient in our framework, is not in general the non-cooperative equilibrium outcome.

Dates and versions

halshs-00754183 , version 1 (20-11-2012)

Identifiers

Cite

Pierre-Philippe Combes, Gilles Duranton. Labor Pooling, Labor Poaching, and Spatial Clustering. Regional Science and Urban Economics, 2006, 36 (1), pp.1-28. ⟨10.1016/j.regsciurbeco.2005.06.003⟩. ⟨halshs-00754183⟩
184 View
0 Download

Altmetric

Share

Gmail Mastodon Facebook X LinkedIn More