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We investigate the effects of aging on regional productivity growth, the mechanisms and the strength of which are not well-understood. We focus on two different manifestations of population aging—workforce aging and an increasing share of retirees—and investigate channels through which aging may impact on regional productivity growth for a panel of German counties 2000–2019. We find that workforce aging is more negatively associated with productivity growth in urban than in nonurban regions. A likely reason is that aging is detrimental to innovative and knowledge-intensive activities, which are heavily concentrated in cities. We also find a negative association between the share of the retired population and productivity growth in regions with a small household services sector. A likely reason is that older people’s disproportionate demand for local household services (including health care, recreation) requires a re-allocation of resources from more productive manufacturing or business services to less productive household services. Regions specialized more in highly productive industries have more to lose in this process.

Based on information from a large sample of German researchers and using business ownership and nascent entrepreneurship as alternative indicators of academic entrepreneurship, we use mediation analysis to analyze the direct effects of researchers' entrepreneurship attitudes, age, gender, and citizenship as well as the related indirect influences. Industrial cooperation, industry consulting, and patenting are used as alternative mediator variables. Focusing first on the overall drivers of academic entrepreneurship, the results show differences in the drivers of business ownership and nascent entrepreneurship. With regard to age, we find positive and significant indirect effects; they are negative for females; and positive for German citizens. The identification of direct and indirect channels of influence on academic entrepreneurship is the main contribution of this work.

The article studies the impact of a switch from free to charged highway provision on firm numbers and private sector employment in a panel of Portuguese municipalities covering the period 2007–2013. It exploits the fact that tolls on certain highways in Portugal were unexpectedly introduced in reaction to the sovereign debt crisis to establish causality. Findings suggest that the price of highway tolls in terms of forgone employment and firm formation may be substantial. Comprehensive analyses of effect heterogeneity reveal that the effects differ across municipalities, sectors and firm size classes. The negative effects of highway tolls are strongest in the municipalities traversed by the newly tolled highways and seem to decrease with distance from these highways, whereas distance to Lisbon aggravates the negative effects of the tolls. We also find that larger firms and manufacturing firms are more strongly affected by the tolls than smaller firms and firms in the service sector and that the negative effect on firm numbers is strongest immediately after the introduction of the tolls, whereas the negative effect on employment increases with the duration of the treatment.

The paper provides insights into drivers of foreign technology licensing from the licensee's perspective, using data across 114 nations. Technology licensing enables licensees to access proven technologies without development delays, although licensors might deny licenses for strategic reasons. Results show that firms with own R&D are more likely to license foreign technologies, as are larger firms and firms in the nations' main business cities. However, the macroeconomic and institutional environment matters as well: domestic interest rates, informal sector competition, and the literacy of a country's labor force all impact foreign technology licensing. Some implications for technology policy are discussed.

This paper uses firm-level survey for more than 100 countries to examine whether firms’ female managers or female owners were better at bringing innovations to the market than males. In contrast to most of the literature that focuses on the performance of female managers/owners, this paper addresses conduct with regard to innovation. Results show that female owners, rather than female managers, were more likely to introduce innovations. Further, R&D performing firms introduced innovations, as did larger and older firms. The presence of an informal sector and finance availability constraints actually spurred innovation introductions, with economic prosperity leading to complacency in innovation introductions.

Since the mid-1990s German technology policy has experienced a paradigmatic shift from standard grant schemes towards a region-oriented and competition-based R&D policy. Currently, a new policy experiment, the InterClust contest, is under way, trying to simultaneously foster place-based innovation, R&D internationalization and the internationalization of innovative places. The current paper analyses the new policy, relating it to the recent literatures on heterogeneous firms and on cluster-life cycles, and presents results from a firm survey performed in 21 winner regions of InterClust. Findings show that the new funding scheme takes insights from recent theoretical developments into account and addresses important impediments to firm and cluster internationalization. Although it is too early for an overall assessment, it is argued that the long-term impact will critically depend on the inflow of heterogeneous knowledge and the strength of intra-regional mobilization effects.

We analyze how different kinds of innovation affect firms‘ export propensity, finding a positive impact of incremental innovations, whereas radical innovations need more time to affect exporting. Evidence for an isolated impact of process innovations or imitations is not found.

The paper investigates the determinants of Internet adoption in poor countries, focusing on the role of macro-geographic location (neighborhood). It is argued that neighboring countries are interconnected by various kinds of spillovers, including knowledge spillovers as well as spillovers of norms and attitudes that affect individual adoption behavior. The empirical findings support the view that Internet adoption is affected by adoption rates in neighboring countries, even when controlling for a wide range of covariates. Addressing potential endogeneity concerns using an instrumental variable approach moreover suggests these relationships to be causal. The findings imply that international policies to support Internet adoption in poor countries might be more effective if they target groups of neighboring countries rather than single countries in order to better exploit spillovers between neighboring countries.

The article analyses the interrelation between unemployment and new business formation using panel data for a large cross-section of countries. We find robust evidence for a positive influence of u...

David Audretsch has made several important contributions to the literature in Economics: He is well-known for his contributions to the study of innovation and firm size, for his highly influential book Innovation and Industry Evolution, for the (co-) development of the Knowledge Spillover Theory of Entrepreneurship and as a co-founder and co-editor of the renowned entrepreneurship journal Small Business Economics. Apart from this, David has significantly contributed to a better understanding of the role of location as a determinant of firm performance. This chapter deals with two joint papers by David Audretsch and Dirk Dohse (one also co-authored by Annekatrin Niebuhr) that established a direct link between locational characteristics and firm performance, their reception in the scientific community and impact on subsequent literature, and the current state of research in the field.

Does regional unemployment increase or rather decrease entrepreneurial activity? Although this question has been hotly debated among researchers for decades, the answers yielded so far are ambiguous and inconclusive. The paper proposes an innovative approach that takes not only interregional differences in unemployment rates, but also in unemployment duration and the human capital of the unemployed, that is, in the structure of regional unemployment into account. Both, the skill structure of the unemployed and the share of long-term unemployment are found to have an important impact on regional start-up activity. Moreover, the impact of unemployment structure on new firm formation is found to vary with the knowledge-intensity of the start-ups.

Although there is a large and rapidly growing literature on the determinants of regional variation in new firm formation, relatively little is known about the interrelation between the characteristics of start-up firms and urban structure. It is only recently that scholars of urban economics have suggested a theoretical link between the thickness of regional input markets and the complexity of feasible start-ups. The current paper classifies start-ups in different industry groups according to their complexity and analyzes the impact of regional input market thickness on the frequency of start-ups with different degrees of complexity. We find that thicker input markets do indeed foster more complex start-ups, but that some inputs are more important than others

This paper analyzes the impact of different individual skills and their economy-wide distribution among heterogenous entrepreneurs on a country's catching up-process to the world technology frontier (WTF). Highly skilled entrepreneurs qualify as either technological specialists or as broadly skilled systemic entrepreneurs. Governmental policy may address individual skills or the aggregate composition of skills in society and may be interpreted as education policy. The effectiveness of alternative growth-promoting policies is shown to depend on the relationship between a country's state of development and the prevailing composition of entrepreneurs. Countries far from the WTF benefit from increasing the share of technological specialists, whereas countries close to the WTF benefit from increasing the share of broadly skilled systemic entrepreneurs.

This paper links the performance of new technology firms, measured in terms of employment growth, to geographic location. We introduce a model of firm growth that is specific to characteristics of the location as well as the firm and industry. The model is estimated using a unique data set identifying the growth performance of small technology-based firms in Germany. We find that firm performance, as measured by employment growth, does appear to be influenced by locational characteristics as well as characteristics specific to the firm and the industry. In particular, the empirical evidence suggests that being located in an agglomeration rich in knowledge resources is more conducive to firm growth than being located in a region that is less endowed with knowledge resources. These results suggest the economic value of location as a conduit for accessing external knowledge resources, which in turn, manifests itself in higher rates of growth.

This study examines how modes of entrepreneurship education (active, such as business simulations, versus reflective, such as theory lectures) – alone and in interaction with the universities’ regional context – affect students’ self-employment intentions. Results from a cross-level analysis show that active modes are, irrespective of the regional context, positively related with intentions and attitudes towards entrepreneurship, whereas the effect of reflective modes is contingent on the regional context. The findings have important implications for the ongoing discussion on the teachability of entrepreneurship, the design of educational programmes and for future research.

The current paper analyzes the role of the individual and regional knowledge context in forming university students’ entrepreneurial intentions. As access to knowledge resources is crucial for the growth and survival of knowledge-based start-ups, we argue that an individual’s decision in favor or against becoming an entrepreneur should critically depend on the multilevel context providing her with access to strategically relevant knowledge. A unique dataset for German students and regions allows us to analyze a variety of personal and regional determinants of entrepreneurial intentions among students. At the individual level we find that role models facilitating the transfer of tacit knowledge and the expectation that strong ties will provide know-how and know-who positively impact entrepreneurial intentions. At the regional level we find that a high regional start-up rate in knowledge-based industries and a high growth rate of regional knowledge production positively influence entrepreneurial intentions.

The German Federal Government has undertaken a series of particularly interesting policy experiments in the field of technology policy in recent years, a major policy innovation being the explicit recognition of regional clustering aspects in federal support programmes. The paper provides a categorization and assessment of these policy experiments and tries to shed some new light on two fundamental policy questions that are important beyond the German context: (i) can clusters be built by national government policy action? and (ii) is regionalization of technology policy a suitable means of achieving goals at the national level? We find that utilizing the regional level to boost national innovation and competitiveness can—under certain conditions explicated in the paper—indeed be seen as a promising means of achieving national goals. More specifically, we find that InnoRegio type programmes might be particularly useful in regions with distinctive structural problems such as the Central and Eastern Europea...

A large literature has developed on the geography of innovation. The most important finding from this literature is that the innovation process in general, as well as in particular industries, tend...

How do different strategies of infrastructure provision affect the spatial distribution of firms and households in a federation? The current article analyzes three polar cases: in the first case there is no publicly provided infrastructure at all. The second case is the case of uniform provision, i.e., a federal government provides the same amount of infrastructure to each region, regardless of the initial spatial distribution of firms, households, and tax revenues. The third strategy is decentralized provision, i.e., infrastructure is provided according to regional tax revenues. It is shown that the superior strategy depends on the initial distribution of firms among regions which may reflect historical accidence.

This paper discusses policy implications from the empirical results obtained in the preceding tasks and, in particular, from a survey among city representatives and representatives of migrant organizations in 40 European cities. It argues that cultural diversity is a distinct aspect of migration that must be taken into account when designing policies. Moreover, it pleads for integrating migration and innovation policies to better use the economic potentials linked to migration. In order to achieve this goal, local actors should be incorporated into the design and implementation of (future) integration policies to take adequately into account the regional heterogeneity in diversity effects observed.

In recent decades, the ethnic composition of the European population has changed substantially, leading to a rapid increase of cultural diversity in the EU as a whole, at the level of individual member states, and at the regional level. This paper focusses on the regional level and investigates the relationship between cultural diversity and regional economic performance for the EU 27. Giving particular attention to regional innovation, GDP per capita, and its development over time, the paper finds that culturally more diverse regions are on average more innovative, which translates into higher growth and better economic performance. An important finding of this study is, however, that the positive effect of cultural diversity on regional economic performance is not present in all sub-samples of the European regions alike.

Only recently, it has been argued that technology policy should give more attention to the regions as they could play a key role in the process of technological change. The German Federal Government has tried to do so by initiating a contest in which Germany's leading Biotech regions competed for a given amount of public funding. This paper reports on the aims, the conceptual design and the results of the BioRegio contest (BRC) and tries to place it into a broader theoretical context. It is shown that the new policy instrument cannot solve the fundamental information problem associated with government intervention into the process of technological change, but that it goes into the right direction by taking the regions seriously and giving prominence to the well-functioning interplay of the various elements of regional innovation systems.

The current paper deals with the labour market effects of European Monetary Union (EMU). We compare the EU-memberstates’ susceptibility to asymmetric shocks and their labour market flexibility under status quo conditions. The findings are related to the question which countries are - from a labour market point of view - fit for EMU and which countries should not join EMU from the start. We then consider different policy scenarios and develop an institutional framework suitable to make EMU a labour market success. Special emphasis is given to the optimal interplay between the relevant agents, i.e. the EU-Commission, national governments, employers and trade unions.

This study examines how the extent of entrepreneurship education within university departments influences students’ entrepreneurial intentions in three careers: computer science, electrical engineering, and business. Specifically, it proposes that the effect of such education is (1) contingent on its mode (active, e.g. business plan seminars, vs. reflective, e.g. theory lectures), (2) contingent on the regional context and (3) complemented by individual-level influences such as role models or work experience. Results show that active modes of entrepreneurship education directly increase intentions and attitudes, whereas the impact of reflective modes depends on the regional context. Parental role models and work experience are found to complement entrepreneurship education in different ways. The findings have important implications for theory building as well as for the practice of teaching entrepreneurship.

This study examines how the effect of entrepreneurship education on students’ entrepreneurial intentions is (1) contingent on the mode of education (active, e.g. business plan seminar, vs reflective, e.g. theory lectures), (2) contingent on the regional context and (3) complemented by individual-level influences such as role models or work experience. Results show that active modes of entrepreneurship education directly increase intentions and attitudes, whereas the impact of reflective modes depends on the regional context. Parental role models and work experience are found to complement entrepreneurship education in different ways. The findings have important implications for theory building as well as for the practice of teaching entrepreneurship

We develop an endogenous growth model which is focussed on entrepreneurial skills and their impact on growth and convergence. Our work is closely related to the model by Acemoglu et al. (2006) but extends their analysis in some important respects. Entrepreneurs in our model dispose of two different skills (technological and systemic skills) and we are able to show that it is not only the absolute skill level but also the aggregate distribution of different skills that drives growth and convergence of an economy towards the world technology frontier

The BioRegio contest and the BioProfile contest initiated by the German Federal Government have drawn much international attention as prototypes of a new kind of technology policy aiming at the exploitation of regional innovation and growth potential through clustering. There is, however, little systematic analysis of their actual impact on the development of commercial biotechnology in Germany. The current paper tries to fill this gap. We find that although these contests have catalyzed the emergence and early growth of German commercial biotech it takes more than isolated policy action by national governments to grow a self-sustainable biotech industry in Europe

Although there is a host of literature on the locational choice of traditional economy firms, relatively little is known about the locational needs and preferences of new economy firms. Therefore, the current paper provides an empirical analysis of the factors determining the regional distribution of new economy firms in Germany. Using a count data analysis, we find evidence that the number of firms listed in a particular region depends positively on the region’s knowledge potential (as measured by the number of patents or by the number of R&D employees) as well as on the regional supply of venture capital.

1 Clusters and Competition as Engines of Innovation- An Introduction.- I: Geography and Innovation.- 2 Globalization, Innovation and the Strategic Management of Places.- 3 Regional Innovation and Learning Systems, Clusters, and Local and Global Value Chains.- 4 Networks and Technological Change in Regional Clusters.- 5 How and Why Does the Efficiency of Regional Innovation Systems Differ?.- II: The Anatomy of Clusters.- 6 Regional Clusters: What We Know and What We Should Know.- 7 The Demography of Clusters-Findings from the Cluster Meta-Study.- 8 Drivers of Economic Growth: The Role of Innovative Clusters.- III: Identifying Agglomeration Economies.- 9 Productivity and the Density of Regional Clusters.- 10 The Agglomeration Wage Differential Reconsidered: An Investigation Using German Micro Data 1984-1997.- 11 Skills and Clusters.- IV: The Role of Institutions.- 12 Corporate Governance of Cluster Development Agencies: The Case for Market Orientation.- 13 Unions, Innovation and Scale.- 14 Big Government in a Small World: The Effect of Public Expenditure on Economic Growth.- 15 Economic Innovations Depend on Political Innovations: On Deregulating the Political Process.- V: Cluster-based Innovation Policies.- 16 Territorial Competition: Lessons for (Innovation) Policy.- 17 New Firms, Regional Development and the Cluster Approach- What Can Technology Policies Achieve?.- 18 Taking Regions Seriously: Recent Innovations in German Technology Policy.- List of Figures.- List of Tables.- List of Contributors.

In the era of globalization with its ever-increasing competitive pressure on firms and their employees new knowledge—and particularly new technical knowledge—has become the most important production factor. Moreover, the way that new technical knowledge itself is produced has rapidly changed in recent years: Knowledge production becomes more and more complex, such that more and more people interact in this specific production process and the half-life period of new technical knowledge becomes shorter and shorter which means that enterprises that want to stay on top have to speed up the process of knowledge production. These fundamental changes in the way that new technology is produced challenge traditional technology policy approaches and call for policy innovations. Indeed, as the OECD has documented, in most industrialized countries policymakers try—more or less successfully—to reform their traditional technology policy approaches (OECD 2000).

Never since Marshall’s seminal work on locational choice and industrial districts has the cluster idea been given more prominence than in the last decade, prominence that was in particular triggered by Porter (1990) and Enright (1990). This is not too surprising since “... both, firms keen to improve their competitiveness, and governments keen to exploit new sources of economic growth, need to understand how innovation works in order to better stimulate it”(OECD 1999). And there are many indications that, increasingly, regional growth and innovation seem to emerge from innovative complexes of firms and organizations. It is argued that it is primarily within these geographically concentrated networks or “clusters”, that regional value-added and employment growth are realized. “Policymakers care about industrial clusters and their geographical location, since clusters are associated with rents. Membership of clusters and inter-firm networks is strongly believed to enhance the productivity, and competitive performance of firms” (Forslid and Midelfart Knarvik 2002:2). It is widely recognized now that prominent clusters like California’s Silicon Valley or Boston’s Route 128 are just two examples of many clusters around the world. Regional governments have tried to imitate successful formations of innovative clusters, thereby entering into heavy competition for mobile capital and highly skilled labor. At the center of scientific and political interest are new growth sectors such as information technology, biotechnology, environmental technology and multimedia. It is discussed whether the externalities inherent in these cluster-intensive industries are strong enough to bring (regional) economies onto a higher growth path and what institutions are needed to capture the growth opportunities that these industries provide.

The Neuer Markt, launched in 1997 by Deutsche Börse, the German stock exchange, is Europe’s closest equivalent to the Nasdaq, the US high-tech oriented stock market. Although the New Economy in Germany is not restricted to Neuer Markt firms one may argue that these firms and their employees form the spearhead of Germany’s New Economy. In the current paper we employ the ‘dartboard approach’ pioneered by Ellison and Glaeser to analyse the spatial concentration of New Economy employment in Germany, the coagglomeration of firms belonging to different sub-sectors of Neuer Markt and the (intraregional) spillovers between different high tech industries. We refine the analysis by differentiating between Neuer Markt firms in general and New Economy firms in a more narrow sense, and we compare their spatial distribution with the structure of the ‘traditional economy’ as well as with the spatial distribution of other innovative activities such as patent applications or R&D. Key Words: Geographic concentration, New Economy, Neuer Markt, Dartboard Approach JEL Classification: G19, O30, O18, R11

The debate about European monetary union has for a long time been dominated by questions of fiscal convergence and the macroeconomic stability of the euro. Relatively little attention has been given to the labor market effects of EMU, although labor market performance is likely to be crucial for the long-term success or failure of EMU. In this paper we focus on the question how EMU might affect the future performance of European labor markets and discuss ways of coping with the adjustment requirements in potential problem regions of the euro area.

There seems to be unanimity among economists that new knowledge is one of the most important sources of economic growth. The spatial dimension of knowledge, however, is often neglected. Obviously, the costs of information transfer over large distances have been rapidly decreasing during the last decades. So, at first glance, in the age of internet, fax and e-mail spatial aspects may seem of ever decreasing influence. This is, however, not the whole story: Recent empirical studies have shown that knowledge spillovers are geographically localized (e.g., Glaeser et al. 1992; Jaffe et al. 1993; Audretsch, Feldman 1996; Keller 2000). This may be due to the fact that new knowlege is often unstructured and highly complex (tacit knowledge) and can thus best be transferred face to face (Polanyi 1958). Furthermore, new knowledge is often produced cooperatively in joint ventures or innovation networks. In these cases, the advantage of spatial proximity is not so much the reduction of information costs but the fact that only close personal relationships allow for the evolution of incentive and sanction mechanisms necessary for the keeping of the implicit cooperation contracts (Brocker 1995).

There has been a remarkable change in German technological policy during the last years.The first thing to mention is that technological policy in Germany takes a broader view now, focussing not only on knowledge creation (i.e. the invention process per se) but also on knowledge diffusion and faster commercialization. The second noteworthy change is the growing importance of regions as reference units for technogical policy initiatives. The most prominent example is the BioRegio-contest initiated by the Federal Research Ministry in which 17 German regions compete for a given amount of public funding. In the current paper it will be shown that the spatial implications of biotechnology are quite different from those of other technologies. Building on the results of this analysis we investigate the spatial consequences of the BioRegio-contest and discuss possible trade offs between technological policies and regional development policies. Key words: regional innovation policy, biotechnology, competition between regions JEL-classification: O31, O33, R11

This paper discusses the challenges that European Monetary Union (EMU) poses for European labor markets, emphasizing in particular the regional dimension of the European unemployment problem. The authors argue that the inability of labor markets to adjust to shocks is largely a regional problem within EMU member countries, requiring structural reforms to enhance labor market flexibility but also a decentralization of competencies and greater diversity of labor market outcomes. Any attempt to successfully reform European labor markets and “make them fit for EMU” has to take into account the regional–and even a more decentralized firm–perspective.

The debate about European monetary union has so far been dominated by questions of fiscal convergence, the adequate conversion exchange rate and the stability of the Euro. Relatively little attention has been given to the labour market effects although labour market performance will be crucial for the long-term success or failure of EMU. The following article deals with the interrelationship between EMU and labour market flexibility in Euroland.

We pursue the question of whether and how differences in productive public expenditure impacts on industrial location. The public sector, which operates with a balanced budget constraint, finances its expenditures taxing residents’ income. Since the introduction of productive public expenditure and taxation affects in opposite direction the industrial location, results are very sensitive to the specific parameter constellation assumed. That is, it is not straightforward that following an increase in productive public expenditure in a region, that region will necessarily enjoy stronger agglomeration. As a major contribution to the literature, our approach considers jointly two effects arising from public policy decisions on expenditure: the demand effect and the productivity effect. The interplay of these two effects determines the final impact of an increase in productive public spending in one region on the spatial distribution of firms. Furthermore, the latter result is influenced by the way in which tax payers of the two regions contribute to the financing of productive public expenditure. Finally, in the case of symmetric regions, the impact on welfare of an increase in productive public services is found to be positive under certain conditions.