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The Extension of Clusters: Difference-in-Differences Evidence from the Bavarian State-Wide Cluster Policy

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Listed:
  • Oliver Falck
  • Stephan Heblich
  • Stefan Kipar

Abstract

If one cluster increases local competitiveness, can politicians, by interlinking clusters, achieve an even better effect at the state level? To answer this question, the paper analyzes the “Cluster Initiative” introduced in 1999 by the Bavarian State Government. The purpose of the initiative was to create a Bavarian-wide innovation network in support of state-wide knowledge flows. Using a difference-in-differences approach, we find that introducing the Bavarian-wide cluster policy increased the likelihood of innovation by a firm in the targeted industry by 4 to 7 percentage points. However, this effect is mainly driven by large firms’ increased likelihood to innovate.

Suggested Citation

  • Oliver Falck & Stephan Heblich & Stefan Kipar, 2008. "The Extension of Clusters: Difference-in-Differences Evidence from the Bavarian State-Wide Cluster Policy," CESifo Working Paper Series 2463, CESifo.
    • Handle: RePEc:ces:ceswps:_2463
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    Cited by:

    1. Qiuyun Zhao & Zeyu Li & Zuoxiang Zhao & Jinqiu Ma, 2019. "Industrial Policy and Innovation Capability of Strategic Emerging Industries: Empirical Evidence from Chinese New Energy Vehicle Industry," Sustainability, MDPI, vol. 11(10), pages 1-17, May.
    2. Erik E. Lehmann & Matthias Menter, 2018. "Public cluster policy and performance," The Journal of Technology Transfer, Springer, vol. 43(3), pages 558-592, June.
    3. Michael Rothgang & Bernhard Lageman, 2011. "Innovationspolitischer Mehrwert durch Vernetzung?: Cluster- und Netzwerkförderung als Politikinstrument auf Bundes- und Länderebene," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 80(3), pages 143-166.
    4. Ansgar Dorenkamp & Ivo Mossig, 2010. "Economic Policy and its Impact on the Evolution of Clusters and Spatial Systems Exemplified by German TV Programme Production," Chapters, in: Dirk Fornahl & Sebastian Henn & Max-Peter Menzel (ed.), Emerging Clusters, chapter 3, Edward Elgar Publishing.
    5. Michael Rothgang & Bernhard Lageman & Anne-Marie Scholz, 2021. "Why are there so few hard facts about the impact of cluster policies in Germany? A critical review of evaluation studies," Review of Evolutionary Political Economy, Springer, vol. 2(1), pages 105-139, April.

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    More about this item

    Keywords

    difference-in-differences; cluster policy; regional policy;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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