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Can regional policy affect firms' innovation potential in lagging regions?


  • Amnon Frenkel

    () (Center for Urban and Regional Studies, Technion - Israel Institute of Technology, Haifa, Israel.)


The initiation of innovation in lagging regions has become one of the most pressing issues in regional policy. Several studies have attempted to identify the factors that influence the creation and development of product innovation in firms located in lagging regions. The identification of these factors could assist regional decision-makers in promoting technological innovation in such regions. The research question investigated in this study is whether the effectiveness of such regional policies is related to the degree of regional innovation potential and innovativness. This paper tries to deal with this central question by implementing an extended empirical model developed by the author. The Extended Model combines two prevailing probability models: LOGIT and Bayesian decision theory. The data analyzed in the paper were collected from a field survey of a sample of 211 industrial firms located in the northern region of Israel. In the first stage of the analysis, the model was used to identify variables influencing product innovation; the second stage investigates changes in the probability of producing innovations in the defined region. The results of the analyses point to the effectiveness of a regional policy that could promote and support the creation of factors fostering technological innovation in selected industries in lagging regions.

Suggested Citation

  • Amnon Frenkel, 2000. "Can regional policy affect firms' innovation potential in lagging regions?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 34(3), pages 315-341.
  • Handle: RePEc:spr:anresc:v:34:y:2000:i:3:p:315-341
    Note: Received: March 1998 / Accepted: July 1999

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    Cited by:

    1. Amnon Frenkel & Daniel Shefer & Knut Koschatzky & Gunter Walter, 2001. "Firm Characteristics, Location and Regional Innovation: A Comparison Between Israeli and German Industrial Firms," Regional Studies, Taylor & Francis Journals, vol. 35(5), pages 415-429.
    2. Alexandra Goudi & Dimitris Skuras & Kyriaki Tsegenidi, 2003. "Innovation and Business Performance in Rural and Peripheral Areas of Greece," ERSA conference papers ersa03p337, European Regional Science Association.
    3. Amnon Frenkel, 2001. "Barriers and Limitations in the Development of Industrial Innovation in the Region," ERSA conference papers ersa01p38, European Regional Science Association.
    4. Świadek Arkadiusz, 2007. "Technology and Space in Innovation Performance of Polish Regions," Folia Oeconomica Stetinensia, De Gruyter Open, vol. 6(1), pages 141-152, January.
    5. repec:kap:ecopln:v:50:y:2017:i:2:d:10.1007_s10644-016-9184-z is not listed on IDEAS
    6. Świadek Arkadiusz, 2012. "Influence the intensity of industrial relations on the innovative activity. Case of Lubuskie voivodeship in 2008-2010," Management, De Gruyter Open, vol. 16(2), pages 269-281, December.
    7. Arkadiusz Œwiadek, 2015. "Horizontal Spatial Proximity And Innovation Activity In Polish Regions," Polish Journal of Management Studies, Czestochowa Technical University, Department of Management, vol. 11(1), pages 147-157, June.
    8. Świadek Arkadiusz & Szopik-Depczyńska Katarzyna, 2012. "Innovative Mechanisms in Territorial Industrial Systems – Western Pomerania Case," Folia Oeconomica Stetinensia, De Gruyter Open, vol. 11(1), pages 178-191, January.
    9. Andrew Copus & Dimitris Skuras & Kyriaki Tsegenidi, 2006. "Innovation and Peripherality: A Comparative Study in Six EU Member Countries," ERSA conference papers ersa06p295, European Regional Science Association.

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