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Evaluating a place-based innovation policy: Evidence from the innovative Regional Growth Cores Program in East Germany

Author

Listed:
  • Falck, Oliver
  • Koenen, Johannes
  • Lohse, Tobias

Abstract

We evaluate one of the largest place-based innovation policies in Germany - the Innovative Regional Growth Cores (IRGC) program. It subsidizes collaborative development and commercialization projects of firms and public research institutes co-located in regions in Eastern Germany, with the explicit goal of generating local spillovers to promote regional economic development. We evaluate three potential types of effects with regard to a broad set of outcomes at the firm and regional level: (1) The policy's effects on directly subsidized firms;(2) spillover effects on non-subsidized innovative firms located in the same region;(3) (aggregate) effects on regional-level economic outcomes. We find that directly treated firms increase their R&D activities in the short-and medium-run. However, we are not able to provide significant or economically meaningful evidence for the effectiveness of channels (2) and (3), applying a wide range of econometric methods. Overall, these results cast doubt about the effectiveness of the program.

Suggested Citation

  • Falck, Oliver & Koenen, Johannes & Lohse, Tobias, 2019. "Evaluating a place-based innovation policy: Evidence from the innovative Regional Growth Cores Program in East Germany," Munich Reprints in Economics 78265, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:78265
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    Cited by:

    1. Blesse, Sebastian & Diegmann, André, 2022. "The place-based effects of police stations on crime: Evidence from station closures," Journal of Public Economics, Elsevier, vol. 207(C).
    2. Toshihiro Okubo & Tetsuji Okazaki & Eiichi Tomiura, 2022. "Industrial cluster policy and transaction networks: Evidence from firm‐level data in Japan," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(4), pages 1990-2035, November.
    3. Maximilian v. Ehrlich & Henry G. Overman, 2020. "Place-Based Policies and Spatial Disparities across European Cities," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 128-149, Summer.
    4. Justin T Callais & Linan Peng, 2021. "The Impact of Place-Based Policy: Evidence from a Multiple Synthetic Control Analysis of the Northeastern Revitalization Program in China," Working Papers 2021-03, DePauw University, School of Business and Leadership and Department of Economics and Management.
    5. Lu, Hongyou & Liu, Min & Song, Wenjing, 2022. "Place-based policies, government intervention, and regional innovation: Evidence from China's Resource-Exhausted City program," Resources Policy, Elsevier, vol. 75(C).
    6. Koniewski, Maciej & Krupnik, Seweryn & Skórska, Paulina, 2024. "Beyond the average effect of the innovation subsidies: Using case selection via matching to break impasse in delivering useful advice to policy makers," Evaluation and Program Planning, Elsevier, vol. 104(C).
    7. Chen, Yang & Li, Weiwei & Yi, Pingtao, 2020. "Evaluation of city innovation capability using the TOPSIS-based order relation method: The case of Liaoning province, China," Technology in Society, Elsevier, vol. 63(C).
    8. Bleda, Mercedes & Krupnik, Seweryn, 2024. "Risks of policy failure in direct R&D support," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    9. Liao, Liping & Kong, Shuning & Du, Minzhe, 2025. "The effect of clean heating policy on individual health: Evidence from China," China Economic Review, Elsevier, vol. 89(C).
    10. Ferrara, Antonella Rita & Dijkstra, Lewis & McCann, Philip & Nisticó, Rosanna, 2022. "The response of regional well-being to place-based policy interventions," Regional Science and Urban Economics, Elsevier, vol. 97(C).

    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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