Subsidized to change? The impact of R&D policy on regional technological diversification

Lars Mewes and Tom Broekel ()

No 2003, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: Previous research shows ample evidence that regional diversification is strongly path-dependent, as regions are more likely to diversify into related than unrelated activities. In this paper, we ask whether contemporary innovation policy in form of R&D subsidies intervenes in the process of regional diversification. We focus on R&D subsidies and assess if they cement existing path-dependent developments, or if they help in breaking these by facilitating unrelated diversification. To investigate the role of R&D policy in the process of regional technological diversification, we link information on R&D subsidies with patent data and analyze the diversification of 141 German labor-market regions into new technology classes between 1991 and 2010. Our findings suggest that R&D subsidies positively influence regional technological diversification. In addition, we find significant differences between types of subsidy. Subsidized joint R&D projects have a larger effect on the entry probabilities of technologies than subsidized R&D projects conducted by single organizations. To some extent, collaborative R&D can even compensate for missing relatedness by facilitating diversification into unrelated technologies.

Keywords: regional technological diversification; relatedness; innovation; policy; R&D subsidies (search for similar items in EconPapers)
JEL-codes: O31 O33 O38 (search for similar items in EconPapers)
Date: 2020-01, Revised 2020-01
New Economics Papers: this item is included in nep-cse, nep-eur, nep-ino, nep-ppm, nep-sbm, nep-tid and nep-ure
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Citations: View citations in EconPapers (12)

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Journal Article: Subsidized to change? The impact of R&D policy on regional technological diversification (2020)
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