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Evaluating a place-based innovation policy: Evidence from the innovative Regional Growth Cores Program in East Germany

Oliver Falck (), Johannes Koenen () and Tobias Lohse

Regional Science and Urban Economics, 2019, vol. 79, issue C

Abstract: We evaluate one of the largest place-based innovation policies in Germany – the Innovative Regional Growth Cores (IRGC) program. It subsidizes collaborative development and commercialization projects of firms and public research institutes co-located in regions in Eastern Germany, with the explicit goal of generating local spillovers to promote regional economic development. We evaluate three potential types of effects with regard to a broad set of outcomes at the firm and regional level: (1) The policy's effects on directly subsidized firms; (2) spillover effects on non-subsidized innovative firms located in the same region; (3) (aggregate) effects on regional-level economic outcomes. We find that directly treated firms increase their R&D activities in the short- and medium-run. However, we are not able to provide significant or economically meaningful evidence for the effectiveness of channels (2) and (3), applying a wide range of econometric methods. Overall, these results cast doubt about the effectiveness of the program.

Keywords: Innovation; Place-based policy; Germany (search for similar items in EconPapers)
JEL-codes: O31 R11 R50 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.regsciurbeco.2019.103480

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