IDEAS home Printed from https://ideas.repec.org/p/jrp/jrpwrp/2020-004.html
   My bibliography  Save this paper

Does Successful Innovation Require Large Urban Areas? Germany as a Counterexample

Author

Listed:
  • Michael Fritsch

    (Friedrich Schiller University Jena and Halle Institute for Economic Research (IWH), Germany.)

  • Michael Wyrwich

    (University of Groningen, The Netherlands and Friedrich Schiller University Jena, Germany.)

Abstract

Popular theories claim that innovation activities should be located in large cities because of more favorable environmental conditions that are absent in smaller cities or remote and rural areas. Germany provides a clear counterexample to such theories. We argue that a main force behind the geography of innovation in Germany is the country's federal tradition that has shaped the settlement structure, the geographic distribution of universities and public research institutions, as well as local access to finance. Additional factors that may play a role in this respect are the system of education and the tax treatment of inheriting a business. We demonstrate the long-lasting effect of the historical political structure and distribution of knowledge sources on innovation activities today. We conclude that historical factors that shape the settlement structure and location of knowledge sources are of key importance for the geographic location of innovation activities.

Suggested Citation

  • Michael Fritsch & Michael Wyrwich, 2020. "Does Successful Innovation Require Large Urban Areas? Germany as a Counterexample," Jena Economic Research Papers 2020-004, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2020-004
    as

    Download full text from publisher

    File URL: http://www2.wiwi.uni-jena.de/Papers/jerp2020/wp_2020_004.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Feldman, Maryann P. & Kogler, Dieter F., 2010. "Stylized Facts in the Geography of Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 381-410, Elsevier.
    2. Michael Fritsch & Ronney Aamoucke, 2013. "Regional public research, higher education, and innovative start-ups: an empirical investigation," Small Business Economics, Springer, vol. 41(4), pages 865-885, December.
    3. Philip McCann & Raquel Ortega-Argil�s, 2015. "Smart Specialization, Regional Growth and Applications to European Union Cohesion Policy," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1291-1302, August.
    4. Michael Fritsch & Michael Wyrwich, 2018. "Regional knowledge, entrepreneurial culture, and innovative start-ups over time and space―an empirical investigation," Small Business Economics, Springer, vol. 51(2), pages 337-353, August.
    5. Audretsch, David B. & Lehmann, Erik E., 2016. "The Seven Secrets of Germany: Economic Resilience in an Era of Global Turbulence," OUP Catalogue, Oxford University Press, number 9780190258696.
    6. Michael Fritsch & Dirk Schilder, 2008. "Does Venture Capital Investment Really Require Spatial Proximity? An Empirical Investigation," Environment and Planning A, , vol. 40(9), pages 2114-2131, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Erik E. Lehmann & Nikolaus Seitz & Katharine Wirsching, 2017. "Smart finance for smart places to foster new venture creation," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 44(1), pages 51-75, March.
    2. Fritsch, Michael & Wyrwich, Michael, 2021. "Is innovation (increasingly) concentrated in large cities? An international comparison," Research Policy, Elsevier, vol. 50(6).
    3. Heredia Pérez, Jorge A. & Geldes, Cristian & Kunc, Martin H. & Flores, Alejandro, 2019. "New approach to the innovation process in emerging economies: The manufacturing sector case in Chile and Peru," Technovation, Elsevier, vol. 79(C), pages 35-55.
    4. Matthias Firgo & Peter Mayerhofer, 2018. "(Un)related variety and employment growth at the sub‐regional level," Papers in Regional Science, Wiley Blackwell, vol. 97(3), pages 519-547, August.
    5. Fritsch, Michael & Changoluisa, Javier, 2017. "New business formation and the productivity of manufacturing incumbents: Effects and mechanisms," Journal of Business Venturing, Elsevier, vol. 32(3), pages 237-259.
    6. Pierre-Alexandre Balland & Ron Boschma, 2021. "Do scientific capabilities in specific domains matter for technological diversification in European regions?," Papers in Evolutionary Economic Geography (PEEG) 2116, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2021.
    7. Konon, Alexander & Fritsch, Michael & Kritikos, Alexander S., 2018. "Business cycles and start-ups across industries: An empirical analysis of German regions," Journal of Business Venturing, Elsevier, vol. 33(6), pages 742-761.
    8. Giancarlo Giudici & Massimiliano Guerini & Cristina Rossi-Lamastra, 2019. "The creation of cleantech startups at the local level: the role of knowledge availability and environmental awareness," Small Business Economics, Springer, vol. 52(4), pages 815-830, April.
    9. Süsser, Diana & Döring, Martin & Ratter, Beate M.W., 2017. "Harvesting energy: Place and local entrepreneurship in community-based renewable energy transition," Energy Policy, Elsevier, vol. 101(C), pages 332-341.
    10. Michael Berlemann & Vera Jahn & Robert Lehmann, 2018. "Auswege aus dem Dilemma der empirischen Mittelstandsforschung," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(23), pages 22-28, December.
    11. Matthias Firgo & Peter Mayerhofer, 2015. "Wissens-Spillovers und regionale Entwicklung - welche strukturpolitische Ausrichtung optimiert des Wachstum?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 144, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    12. Tomasz Kijek & Anna Matras-Bolibok, 2020. "Knowledge-intensive Specialisation and Total Factor Productivity (TFP) in the EU Regional Scope," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 68(1), pages 181-188.
    13. Forman, Chris & van Zeebroeck, Nicolas, 2019. "Digital technology adoption and knowledge flows within firms: Can the Internet overcome geographic and technological distance?," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    14. Carlino, Gerald & Kerr, William R., 2015. "Agglomeration and Innovation," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 349-404, Elsevier.
    15. Beck, Mathias & Junge, Martin & Kaiser, Ulrich, 2017. "Public Funding and Corporate Innovation," IZA Discussion Papers 11196, Institute of Labor Economics (IZA).
    16. Mohammadi, Ali & Broström, Anders & Franzoni, Chiara, 2015. "Work Force Composition and Innovation: How Diversity in Employees’ Ethnical and Disciplinary Backgrounds Facilitates Knowledge Re-combination," Working Paper Series in Economics and Institutions of Innovation 413, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    17. Hall, Bronwyn H., 2011. "The internationalization of R&D," MERIT Working Papers 2011-049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    18. Riccardo Crescenzi & Guido de Blasio & Mara Giua, 2020. "Cohesion Policy incentives for collaborative industrial research: evaluation of a Smart Specialisation forerunner programme," Regional Studies, Taylor & Francis Journals, vol. 54(10), pages 1341-1353, October.
    19. Sara Amoroso & Alex Coad & Nicola Grassano, 2017. "European R&D networks: A snapshot from the 7th EU Framework Programme," JRC Working Papers on Corporate R&D and Innovation JRC107546, Joint Research Centre (Seville site).
    20. Akcomak, Semih & Erdil, Erkan & Cetinkaya, Umut Yılmaz, 2018. "Knowledge convergence in European regions: Towards cohesion?," MERIT Working Papers 2018-027, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    Keywords

    Innovation; patents; agglomeration economies; cities; Germany;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jrp:jrpwrp:2020-004. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: http://www.wiwiss.uni-jena.de/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Markus Pasche (email available below). General contact details of provider: http://www.wiwiss.uni-jena.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.