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Industry Specialization, Diversity and the Efficiency of Regional Innovation Systems

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Innovation processes are characterized by a pronounced division of labor between actors. Two types of externality may arise from such interactions. On the one hand, a close location of actors affiliated to the same industry may stimulate innovation (MAR externalities). On the other hand, new ideas may be born by the exchange of heterogeneous and complementary knowledge between actors, which belong to different industries (Jacobs' externalities). We test the impact of both MAR as well as Jacobs' externalities on innovative performance at the regional level. The results suggest an inverted u-shaped relationship between regional specialization in certain industries and innovative performance. Further key determinants of the regional innovative performance are private sector R&D and university-industry collaboration.

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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2007-018.

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Date of creation: 05 Jun 2007
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Handle: RePEc:jrp:jrpwrp:2007-018

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Keywords: Innovation; technical efficiency; patents; agglomeration concentration; specialization; diversity; regional analysis.;

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Cited by:
  1. Valerien O. Pede & Raymond J.G.M. Florax & Henri L.F. de Groot, 2011. "Technological Leadership and Sectoral Employment Growth:A Spatial Econometric Analysis for U.S. Counties," Working Papers 11-1, Purdue University, College of Agriculture, Department of Agricultural Economics.
  2. Michael Fritsch & Viktor Slavtchev, 2007. "What determines the efficiency of regional innovation systems?," Jena Economic Research Papers 2007-006, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  3. Schimke, Antje & Teichert, Nina & Ott, Ingrid, 2012. "Impact of local knowledge endowment on employment growth in nanotechnology," Working Paper Series in Economics 38, Karlsruhe Institute of Technology (KIT), Department of Economics and Business Engineering.

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