Industry Concentration and Regional Innovative Performance – Empirical Evidence for Eastern Germany
AbstractRegarding technological innovativeness, the transformed economy of the former German Democratic Republic (GDR) clearly lags behind the Western part of the country. To face this weakness, a broad mixture of policy measures was carried out in recent years. Particular attention is drawn to the development of industry concentrations and economic ‘clusters’. However, little is known about the effectiveness of these policy measures regarding how industry concentrations in fact promote innovative performance in Eastern Germany. The present study tries to fill this gap by analyzing the relationship between industry concentration in Eastern Germany and regional innovative performance. Our empirical analysis is based upon the number of patent applications of 22 manufacturing industries in 22 Eastern German planning regions. The estimated regression models indicate an inverted U-shaped relationship between the degree of industry concentration and innovative performance. An exceedingly high degree of industry concentration in one region hampers regional innovative output. We discuss policy implications of our findings and give recommendations for future refinement of ‘cluster’-supporting policy schemes in Eastern Germany.
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Bibliographic InfoPaper provided by Halle Institute for Economic Research in its series IWH Discussion Papers with number 8.
Date of creation: Apr 2009
Date of revision:
industry concentration; agglomeration; specialization; cluster; innovation; patents; east germany;
Other versions of this item:
- Christoph Hornych & Michael Schwartz, 2009. "Industry concentration and regional innovative performance: empirical evidence for Eastern Germany," Post-Communist Economies, Taylor & Francis Journals, vol. 21(4), pages 513-530.
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
- P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-04-13 (All new papers)
- NEP-GER-2009-04-13 (German Papers)
- NEP-KNM-2009-04-13 (Knowledge Management & Knowledge Economy)
- NEP-TID-2009-04-13 (Technology & Industrial Dynamics)
- NEP-TRA-2009-04-13 (Transition Economics)
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