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The Role of Regional Knowledge for Innovation

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  • Michael Fritsch
  • Viktor Slavtchev

Abstract

There is a broad consent that the extent, quality as well as the success of innovation activity is critically dependent on the generation and the application of knowledge. It is also widely recognized that innovation processes have a pronounced regional dimension and that the conditions for innovation activity may differ considerably between geographic areas. We investigate the contribution of different inputs, particularly different knowledge sources, on regional patenting output in the framework of a knowledge production function. Earlier work (Fritsch & Franke, 2004) suggests that there are considerable differences with regard to the role of different types of knowledge for innovation activity. These different types of knowledge have different degrees of localization. We expect that the impact of the knowledge sources differs by field of as well as according to the type of institution (university vs. non-university public research institution). .One may, therefore, expects that the technology opportunity differs across sectors and geographical areas. However, little is known about such differences. The innovation indicator used in our analysis is the number of patents. The knowledge sources included are: •R&D employment, •R&D employment in small firms and large firms respectively, •Qualification of the regional workforce, •Qualification of employees in small firms and large firms respectively, •Size (number of employees, budget) of public research institutions by field of research. •Amount of research funds from private firms by field of study. •Amount of external research funds from public departments by field of study. •Amount of external research funds from the German Science Foundation (DFG) by field of study. The contribution of these knowledge sources is tested systematically on the level of German districts (Kreise). Information on the different knowledge sources is available for each district on a yearly basis. We test the influence of the knowledge sources in different specifications by including the respective information for the particular region and for adjacent regions. This will reveal the role of local knowledge and of interregional knowledge spillovers for innovation behavior. We expect that technology performance of regions is a path dependent process. The analysis is performed for German regions in the 1990s. Information on the yearly number of patents relates to the years 1995-2000. regional employment is taken from the German Social Insurance Statistics. Information on universities and their funds are taken from the German Hochschulstatistik which has been especially prepared for this analysis.

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  • Michael Fritsch & Viktor Slavtchev, 2005. "The Role of Regional Knowledge for Innovation," ERSA conference papers ersa05p623, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa05p623
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    Cited by:

    1. Wagner, Joachim, 2006. "International Firm Activities and Innovation: Evidence from Knowledge Production Functions for German Firms," HWWA Discussion Papers 344, Hamburg Institute of International Economics (HWWA).
    2. Michael Fritsch & Dirk Schilder, 2008. "Does Venture Capital Investment Really Require Spatial Proximity? An Empirical Investigation," Environment and Planning A, , vol. 40(9), pages 2114-2131, September.
    3. Gianni Guastella & Frank G. van Oort, 2015. "Regional Heterogeneity and Interregional Research Spillovers in European Innovation: Modelling and Policy Implications," Regional Studies, Taylor & Francis Journals, vol. 49(11), pages 1772-1787, November.
    4. Graddy-Reed, Alexandra, 2020. "Getting ahead in the race for a cure: How nonprofits are financing biomedical R&D," Research Policy, Elsevier, vol. 49(8).
    5. Horbach, Jens & Rammer, Christian, 2020. "Labor shortage and innovation," ZEW Discussion Papers 20-009, ZEW - Leibniz Centre for European Economic Research.
    6. Olav Sorenson & Jasjit Singh, 2007. "Science, Social Networks and Spillovers," Industry and Innovation, Taylor & Francis Journals, vol. 14(2), pages 219-238.
    7. Urban Gråsjö, 2008. "University-educated Labor, R&D and Regional Export Performance," International Regional Science Review, , vol. 31(3), pages 211-256, July.
    8. Alexandra Schröter, 2008. "Perspektiven der Innovationspolitik in den neuen Bundesländern," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(02), pages 40-52, 04.
    9. David Audretsch & Marcel Hülsbeck & Erik Lehmann, 2012. "Regional competitiveness, university spillovers, and entrepreneurial activity," Small Business Economics, Springer, vol. 39(3), pages 587-601, October.
    10. Thomas Brenner & Charlotte Schlump, 2011. "Policy Measures and their Effects in the Different Phases of the Cluster Life Cycle," Regional Studies, Taylor & Francis Journals, vol. 45(10), pages 1363-1386, November.
    11. Michael Fritsch & Viktor Slavtchev, 2007. "Universities and Innovation in Space," Industry and Innovation, Taylor & Francis Journals, vol. 14(2), pages 201-218.
    12. Charlie Karlsson & Börje Johansson & Kiyoshi Kobayashi & Roger R. Stough (ed.), 2014. "Knowledge, Innovation and Space," Books, Edward Elgar Publishing, number 13819.
    13. Tom Broekel & Thomas Brenner, 2011. "Regional factors and innovativeness: an empirical analysis of four German industries," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(1), pages 169-194, August.
    14. Jens Horbach, 2020. "The Importance of regional Spill-over Effects for Eco-Innovations in German Start-ups," SEEDS Working Papers 1620, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Dec 2020.
    15. Olof Ejermo & Urban Gråsjö, 2014. "Accessibility to R&D: a re-examination of the consequences for invention and innovation," Chapters, in: Charlie Karlsson & Börje Johansson & Kiyoshi Kobayashi & Roger R. Stough (ed.), Knowledge, Innovation and Space, chapter 3, pages 51-79, Edward Elgar Publishing.
    16. Frosch, Katharina & Tivig, Thusnelda, 2007. "Age, human capital and the geography of innovation," Thuenen-Series of Applied Economic Theory 71, University of Rostock, Institute of Economics.
    17. Daniel Schiller & Javier Revilla Diez, 2010. "Local embeddedness of knowledge spillover agents: Empirical evidence from German star scientists," Papers in Regional Science, Wiley Blackwell, vol. 89(2), pages 275-294, June.
    18. Daniel Schiller & Javier Revilla Diez, 2012. "The Impact of Academic Mobility on the Creation of Localized Intangible Assets," Regional Studies, Taylor & Francis Journals, vol. 46(10), pages 1319-1332, November.
    19. Giovanni Guastella & Frank van Oort, 2011. "On specifying heterogeneity in knowledge production functions," ERSA conference papers ersa11p1114, European Regional Science Association.
    20. Liu, Wan-Hsin, 2008. "Do active innovation policies matter? Findings from a survey on the Hong Kong electronics SMEs," Kiel Working Papers 1445, Kiel Institute for the World Economy (IfW Kiel).
    21. Horbach, Jens, 2013. "Do eco-innovations need specific regional characteristics? An econometric analysis for Germany," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79927, Verein für Socialpolitik / German Economic Association.
    22. Tobias Arvemo & Urban Gråsjö, 2014. "University colleges’ effect on economic growth in Swedish middlesized municipalities," Chapters, in: Charlie Karlsson & Börje Johansson & Kiyoshi Kobayashi & Roger R. Stough (ed.), Knowledge, Innovation and Space, chapter 12, pages 287-304, Edward Elgar Publishing.
    23. Graf, Holger & Henning, Tobias, 2006. "Research in regional networks of innovators: a comparative study of four East-German regions," Freiberg Working Papers 2006/14, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
    24. Fritsch, Michael & Slavtchev, Viktor, 2006. "Measuring the efficiency of regional innovation systems: an empirical assessment," Freiberg Working Papers 2006/08, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
    25. Alexandra Graddy-Reed, 2021. "Decisions of firm risk and the role of organizational identity," Small Business Economics, Springer, vol. 57(1), pages 1-21, June.

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