Industry Specialization, Diversity and the Efficiency of Regional Innovation Systems

29 Pages Posted: 5 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: June 2007

Abstract

Innovation processes are characterized by a pronounced division of labor between actors. Two types of externality may arise from such interactions. On the one hand, a close location of actors affiliated to the same industry may stimulate innovation (MAR externalities). On the other hand, new ideas may be born by the exchange of heterogeneous and complementary knowledge between actors, which belong to different industries (Jacobs' externalities). We test the impact of both MAR as well as Jacobs' externalities on innovative performance at the regional level. The results suggest an inverted u-shaped relationship between regional specialization in certain industries and innovative performance. Further key determinants of the regional innovative performance are private sector R&D and university-industry collaboration.

Keywords: Innovation, technical efficiency, patents, agglomeration concentration, specialization, diversity, regional analysis

JEL Classification: O31, O18, R12

Suggested Citation

Fritsch, Michael and Slavtchev, Viktor, Industry Specialization, Diversity and the Efficiency of Regional Innovation Systems (June 2007). Jena Economic Research Paper No. 2007-018, Available at SSRN: https://ssrn.com/abstract=1019428 or http://dx.doi.org/10.2139/ssrn.1019428

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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