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Does the support of innovative clusters sustainably foster R&D activity? Evidence from the German BioRegio and BioProfile contests

  • Dirk Engel


    (University of Applied Science Stralsund; RWI)

  • Timo Mitze


    (RWI; Ruhr University Bochum)

  • Roberto Patuelli


    (University of Lugano; The Rimini Centre for Economic Analysis (RCEA))

  • Janina Reinkowski


    (ifo Munich)

In this paper, we evaluate the R&D enhancing effects of two large public grant schemes aiming at encouraging the performance of firms organized in clusters. These are Germany's well known BioRegio and BioProfile contests for which we compare the research performance of winning regions in contrast with non-winning and non-participating comparison regions. We apply Difference-in-Difference estimation techniques in a generalized linear model framework, which allows to control for different initial regional conditions in the biotechnology related R&D activity. Our econometric findings support the view that winners generally outperform non-winning participants during the treatment period, thus indicating that exclusive funding as well as the stimulating effect of being a "winner" seems to work in the short-term. In contrast, no indirect impacts stemming from a potential mobilizing effect of the contest approaches have been detected. Also, we find only limited evidence for long-term effects of public R&D grants in the post-treatment period. The results of our analysis remain stable if we additionally augment the model to account for the particular role of spatial dependence in the R&D outcome variables.

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Paper provided by USI Università della Svizzera italiana in its series Quaderni della facoltà di Scienze economiche dell'Università di Lugano with number 1105.

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Length: 36 pages
Date of creation: Feb 2011
Date of revision:
Handle: RePEc:lug:wpaper:1105
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