What Determines the Efficiency of Regional Innovation Systems?

41 Pages Posted: 4 Oct 2007

See all articles by Michael Fritsch

Michael Fritsch

University of Jena - School of Economics and Business Administration

Viktor Slavtchev

Halle Institute for Economic Research

Date Written: April 2007

Abstract

We assess the efficiency of regional innovation systems (RIS) in Germany by means of a knowledge production function. This function relates private sector research and development (R&D) activity in a region to the number of inventions that have been registered by residents of that region. Different measures and estimation approaches lead to rather similar assessments. We find that both spillovers within the private sector as well as from universities and other public research institutions have a positive effect on the efficiency of private sector R&D in the respective region. It is not the mere presence and size of public research institutions, but rather the intensity of interactions between private and public sector R&D that leads to high RIS efficiency. We find that relationship between the diversity of a regions' industry structure and the efficiency of its innovation system is inversely u-shaped. Regions dominated by large establishments tend to be less efficient than regions with a lower average establishment size.

Keywords: Knowledge, innovation, technical efficiency, spillovers, patents, regional analysis

JEL Classification: O31, O18, R12

Suggested Citation

Fritsch, Michael and Slavtchev, Viktor, What Determines the Efficiency of Regional Innovation Systems? (April 2007). Jena Economic Research Paper No. 2007-006, Available at SSRN: https://ssrn.com/abstract=1018593 or http://dx.doi.org/10.2139/ssrn.1018593

Michael Fritsch (Contact Author)

University of Jena - School of Economics and Business Administration ( email )

Carl-Zeiss-Str. 3
D-07743 Jena
Germany

Viktor Slavtchev

Halle Institute for Economic Research ( email )

Kleine Maerkerstrasse 8
Kleine Maerkerstrasse 8
Halle (Saale), 06108
Germany

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