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

Oliver Falck, Stephan Heblich and Stefan Kipar

No 2008-073, Jena Economics Research Papers from Friedrich-Schiller-University Jena

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.

Keywords: Difference-in Difference; Cluster Policy; Regional Policy (search for similar items in EconPapers)
JEL-codes: O32 R11 R38 (search for similar items in EconPapers)
Date: 2008-09-25
New Economics Papers: this item is included in nep-eec, nep-geo, nep-ino and nep-knm
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Citations: View citations in EconPapers (5)

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Working Paper: The Extension of Clusters: Difference-in-Differences Evidence from the Bavarian State-Wide Cluster Policy (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2008-073

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