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Does Cluster Policy Trigger R&D Activity? Evidence from German Biotech Contests

  • Dirk Engel

    ()

    (University of Applied Science Stralsund; RWI)

  • Timo Mitze

    ()

    (RWI; Ruhr University Bochum)

  • Roberto Patuelli

    ()

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

  • Janina Reinkowski

    ()

    (ifo Munich)

This paper evaluates the R&D enhancing effects of two large public grant schemes for the German biotechnology industry (BioRegio, BioProfile). Both grant schemes are organized in the form of contents for cooperation with the goal to foster the performance of innovative firms by their organization in research clusters. We apply a Difference-in-Differences estimation technique in a generalized linear model framework, which allows us to control for different initial regional conditions in R&D activity of the biotech sector. 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” have positive effects on R&D activity in the short-term. Apart from this direct winner effect, for the non-winning participants no beneficial indirect effect due to a mobilization of local actors during the application phase could be detected. Finally, first attempts in estimating the long-term effects of the contests for cooperation approach on the winner regions’ R&D activity in the post-treatment period show ambiguous results.

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Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 15_11.

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Date of creation: Feb 2011
Date of revision: Jan 2012
Publication status: Published in European Planning Studies 21 (11): 1735–59
Handle: RePEc:rim:rimwps:15_11
Contact details of provider: Postal: Via Patara, 3, 47921 Rimini (RN)
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  1. Björn Alecke & Christoph Alsleben & Frank Scharr & Gerhard Untiedt, 2006. "Are there really high-tech clusters? The geographic concentration of German manufacturing industries and its determinants," The Annals of Regional Science, Springer, vol. 40(1), pages 19-42, March.
  2. repec:fth:harver:1473 is not listed on IDEAS
  3. Dirk Fornahl & Tom Broekel & Ron Boschma, 2011. "What drives patent performance of German biotech firms? The impact of R&D subsidies, knowledge networks and their location," Papers in Regional Science, Wiley Blackwell, vol. 90(2), pages 395-418, 06.
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  9. Dirk Engel & Oliver Heneric, 2005. "Biotechnologie-Gründungen im Ruhrgebiet – Eine vergleichende Analyse," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 33, December.
  10. Marshall, Alfred, 1890. "The Principles of Economics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number marshall1890.
  11. Baptista, Rui, 2000. "Do innovations diffuse faster within geographical clusters?," International Journal of Industrial Organization, Elsevier, vol. 18(3), pages 515-535, April.
  12. Dirk Czarnitzki & Bernd Ebersberger & Andreas Fier, 2007. "The relationship between R&D collaboration, subsidies and R&D performance: Empirical evidence from Finland and Germany," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1347-1366.
  13. Dauth, Wolfgang, 2010. "Agglomeration and regional employment growth," IAB Discussion Paper 201007, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  14. Baptista, Rui & Swann, Peter, 1998. "Do firms in clusters innovate more?," Research Policy, Elsevier, vol. 27(5), pages 525-540, September.
  15. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-33, March.
  16. Falck, Oliver & Heblich, Stephan & Kipar, Stefan, 2010. "Industrial innovation: Direct evidence from a cluster-oriented policy," Munich Reprints in Economics 20542, University of Munich, Department of Economics.
  17. Dohse, Dirk, 2000. "Technology policy and the regions -- the case of the BioRegio contest," Research Policy, Elsevier, vol. 29(9), pages 1111-1133, December.
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