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Subsidy and networking: The effects of direct and indirect support programs of the cluster policy

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  • Nishimura, Junichi
  • Okamuro, Hiroyuki

Abstract

Industrial clusters have attracted considerable attention worldwide for their expected contribution to regional innovation. Recently, policymakers in various countries have developed specific cluster policies. However, there exist few empirical studies on cluster policies. Focusing on the Industrial Cluster Project (ICP) in Japan initiated by the Ministry of Economy, Trade and Industry in 2001, we address two research questions on the support programs of the cluster policies: if the project participants who exploit various support programs are more successful in network formation within the cluster than others, and which kind of support program contributes to firm performance. We pay special attention to the differences between direct R&D support and indirect networking/coordination support. The estimation results, which are based on recent original survey data, suggest that cluster participants who exploit support programs (especially indirect support measures) expand the industry-university-government network after participating in the ICP. Moreover, we find that not every support program contributes to firm performance; firms should therefore select the program that is most aligned with their aims. Indirect support programs have an extensive and strong impact on output whereas direct R&D support has only a weak effect.

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  • Nishimura, Junichi & Okamuro, Hiroyuki, 2011. "Subsidy and networking: The effects of direct and indirect support programs of the cluster policy," Research Policy, Elsevier, vol. 40(5), pages 714-727, June.
  • Handle: RePEc:eee:respol:v:40:y:2011:i:5:p:714-727
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    Keywords

    Cluster policy Industrial cluster R&D support Subsidy Networking;

    JEL classification:

    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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