Papers in Evolutionary Economic Geography

December 1, 2009

#09.21 The importance of R&D subsidies and technological infrastructure for regional innovation performance – A conditional efficiency approach

Tom Broekel and Charlotte Schlump

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The importance of R&D subsidies for innovation activities is highlighted by numerous firm-level studies. These approaches miss however the systematic regional character of innovation activities and potential firm-spanning effects of this policy measure. The literature on regional innovation performance has widely neglected R&D subsidies so far.

This paper analyzes the importance of R&D subsidies as well as the relevance of a publicly funded technological infrastructure for the innovation efficiency of German regions. Using conditional nonparametric frontier techniques we find positive effects of R&D subsidies and somewhat smaller ones for the technological infrastructure, which however vary between industries.

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