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The claim of a positive association between a firm’s social assets and its inno-vative capacity is a widely debated topic in the literature. Although controversial, such an argument has informed recent innovation policy across Germany, increasingly di-rected to cluster formation. In the light of the growing attention and financial efforts that cluster-based innovation policies are receiving, it is worth answering two main ques-tions. First, are firms with a relatively high level of social capital likely to be more in-novative? Second, do companies pursuing innovation in partnership innovate more? This paper empirically answers these questions by exploring a cross-sectoral sample of 248 firms based in the Jena region. On the one hand, the extent to which a firm is inte-grated in its community life does not contribute to an explanation of its innovative per-formance. On the other hand, directed cooperation with the specific goal of innovating shows a positive impact on innovative performance. However, the correlation between the extent of the network of co-innovators and firms’ innovative capacity presents an inverted U-shaped relation: there is a threshold in the number of co-innovators justified by the costs of innovating by interacting. A policy lesson can be drawn from these find-ings: cluster-based policies are to be treated with caution as firms face costs of network-ing and not merely benefits.

The literature on Innovation Systems is divided into several directories. Dif- ferences occur through the definition of the system's borders. This paper intro- duces a methodology how to differentiate between regional and technological effects of cooperative innovation activities and analyzes furthermore how dif- ferent dimensions of regional knowledge affect the regional effects on coopera- tive innovation activities. We find evidence that the related variety of knowl- edge available within a region and its combination with a proxy of the amount of knowledge foster regional effects of cooperative innovation activities. Addi- tionally, we find that the development of German regions fits with the sugges- tions of the Regional Innovation System (RIS) approach.

This work deals with the determinants of cooperative invention and innovation within innovation systems. Several proximity dimensions are used to identify the levels on which systemic innovation activities can be observed. To disentangle the effects of different proximity dimensions a procedure is suggested to identify the relative regional impact (RRI) on cooperative invention and innovation. Applying this method to German patent data shows that there are significant differences in the RRI of German regions. These differences are related to measures of the technological relatedness of the regions knowledge bases, and over time they show a considerable path dependency.

This paper concerns the regional innovation system approach. It deals with the characteristics of three regional systems, Northern Hesse, Alpes-Maritime and Jena, and focusses on each regional network of innovators. In this context the importance of the size and homogeneity of a regional pool of knowledge spillovers for those networks is analyzed. We find evidence that an increasing regional knowledge base in combination with an increasing homogeneity of this knowledge base enhances the knowledge ows and the incentives for actors to interact with each other.