The paper, “Joint R and D subsidies, related variety, and regional innovation”, has been published in International Regional Science Review. The paper is co-authored by Matthias Brachert, Matthias Duschl, and Thomas Brenner.
Abstract:
Subsidies for R&D are an important tool of public R&D policy, which motivates extensive scientific analyses and evaluations. The paper adds to this literature by arguing that the effects of R&D subsidies go beyond the extension of organizations’ monetary resources invested into R&D. It is argued that collaboration induced by subsidized joint R&D projects yield significant effects that are missed in traditional analyses.An empirical study on the level of German labor market regions substantiates this claim showing that collaborative R&D subsidies impact regions’ innovation growth when providing access to related variety and embedding regions into central positions in cross-regional knowledge networks.
It can be downloaded here.