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Does light touch cluster policy work? Evaluating the tech city programme

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  • Max Nathan

Abstract

Despite academic scepticism, cluster policies remain popular with policymakers. This paper evaluates the causal impact of a flagship UK technology cluster programme. I build a simple framework and identify effects using difference-in-differences and synthetic controls on rich microdata. I further test for timing, cross-space variation, scaling and churn channels. The policy grew and densified the cluster, but has had more mixed effects on tech firm productivity. I also find most policy 'effects' began before rollout, raising questions about the programme's added value.

Suggested Citation

  • Max Nathan, 2019. "Does light touch cluster policy work? Evaluating the tech city programme," CEP Discussion Papers dp1648, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1648
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    More about this item

    Keywords

    cities; clusters; technology; economic development; synthetic controls;
    All these keywords.

    JEL classification:

    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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