Industrial innovation: Direct evidence from a cluster-oriented policy

Oliver Falck, Stephan Heblich*, Stefan Kipar

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

70 Citations (Scopus)

Abstract

Can local industrial policies increase local firm competitiveness? Cluster-oriented policies targeted at selected industries have just such a goal and are very popular among politicians, despite the controversy surrounding these policies in academia. Thus, it would appear useful to discover if cluster-oriented policies are effective. This paper evaluates the cluster-oriented policy introduced in Bavaria, Germany, in 1999. The policy's goal was to foster innovation and regional competitiveness by stimulating cooperation. Using difference-in-difference-in-differences estimates, we find for different innovation measures that the cluster-oriented policy increased the likelihood of becoming an innovator in the target industries by 4.6 to 5.7 percentage points. At the same time, R&D expenditures decreased by 19.4% on average for firms in target industries, while access to external know-how, cooperation with public scientific institutes, and the availability of suitable R&D personnel increased. (C) 2010 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)574-582
Number of pages9
JournalRegional Science and Urban Economics
Volume40
Issue number6
DOIs
Publication statusPublished - Nov 2010

Keywords

  • Difference-in-differences
  • Difference-in-difference-in-differences
  • Cluster policy
  • Industrial policy
  • SPECIALIZATION
  • SPILLOVERS
  • GEOGRAPHY
  • CITIES
  • LABOR

Cite this