nep-geo New Economics Papers
on Economic Geography
Issue of 2024‒01‒29
five papers chosen by
Andreas Koch, Institut für Angewandte Wirtschaftsforschung

  1. Solving the puzzle? An innovation mode perspective on lagging regions By Hädrich, Tobias; Reher, Leonie; Thomä, Jörg
  2. Spatial heterogeneity in the effect of regional trust on innovation By Bischoff, Thore Sören; Runst, Petrik; Bizer, Kilian
  3. Research Infrastructures and Regional Growth: the case of Europe By L. Vargiu; B. Biagi; M.G. Brandano; P. Postiglione
  4. The Effect of Postsecondary Educational Institutions on Local Economies: A Bird's-Eye View By Patrick Lehnert; Madison Dell; Uschi Backes-Gellner; Eric Bettinger
  5. The effect of applied research institutes on invention: evidence from the Fraunhofer centres in Europe By Llanos Paredes, Pedro

  1. By: Hädrich, Tobias; Reher, Leonie; Thomä, Jörg
    Abstract: The promotion of innovation-driven development in lagging regions is currently on the regional policy agenda, so a sound understanding of how learning and innovation can be successful under the conditions there is crucial. In this context, this paper demonstrates the potential of an innovation mode approach at the micro level of regional innovation systems. Based on a conceptual framework on the relationship between knowledge bases and innovation modes in the field of regional development, a systematic literature review is used to analyse whether this potential has already been exploited in previous innovation studies on lagging regions. The results show that some important steps have already been taken in this direction. However, the potential gain in terms of insights has so far only been realised to a limited extent. Against this background, the authors formulate several avenues for future research on firm-level innovation modes in lagging regions.
    Keywords: Regional innovation, STI innovation mode, DUI innovation mode, Lagging regions, Systematic literature review
    JEL: O18 O30 O38 R11
    Date: 2023
  2. By: Bischoff, Thore Sören; Runst, Petrik; Bizer, Kilian
    Abstract: Previous studies have found that generalized trust positively affects innovation at the country and regional level. We extend this literature by arguing that there are four reasons to believe that the trust-innovation relationship is heterogeneous across geographic space. First, there is a saturation effect where regions in the lower half of the trust distribution are more likely to benefit from an increase in trust than regions in the upper half. Second, trust is more important in regions with less developed innovation capacities as it fosters cooperation and knowledge transfer, which is known to be especially relevant in lagging regions. Third, generalized trust and institutional trust can serve as substitutes: when institutional trust is low, generalized trust can be used as an alternative facilitator of cooperation. Finally, as smaller firms lack the legal capacities for sophisticated contractual arrangements and therefore resort to informal cooperation, the trust-innovation relationship is stronger in regions with a large share of small firms. Our results mostly support the small-firm and lower-trust region hypothesis. These findings underline the fact that regional innovation systems work differently and different mechanisms of cooperation can be leveraged to achieve innovation success depending on the regional characteristics.
    Keywords: Innovation, trust, regional innovation systems
    JEL: D02 D83 O12 O18 O31
    Date: 2023
  3. By: L. Vargiu; B. Biagi; M.G. Brandano; P. Postiglione
    Abstract: The last decades registered a significant increase in Research Infrastructures (RIs) everywhere and in Europe. The EU supports these projects and their activities by implementing strategies and allocating financial resources for these costly projects. Although RIs main goal is to foster science, they produce relevant effects that go beyond scientific output including economic output, innovation, and social impact. These effects take place simultaneously at different geographic levels - regional, national, and international. RIs' hosting regions absorb a significant part of them. This phenomenon is the object of a stream of literature that analyses the several effects that single RIs have on the economy and society. However, little attention is paid to the aggregate dimension of these effects at the regional level and how it changes in different regional contexts. This work contributes to the main literature on RIs socio-economic effects by disentangling the aggregate economic growth effect driven by RIs in EU NUTS 2 regions for two periods - 2001-2020 and 1981-2020. The empirical analysis is carried out on an original database with information about 667 RIs. A spatial Durbin model estimates both the direct impact and spatial spillovers. The main findings suggest that RIs have a positive impact on regional economic growth over the two periods considered. However, spillover effects to neighbouring regions are not significant.
    Keywords: Research Infrastructures;regional economic growth;Socio-economic effects;european regions;spatial analysis
    Date: 2023
  4. By: Patrick Lehnert; Madison Dell; Uschi Backes-Gellner; Eric Bettinger
    Abstract: Over the last 50 years, nations worldwide have established higher education institutions to stimulate local economic growth. However, empirical evidence on local economic outcomes is still scarce, mainly because of a lack of adequate data. This paper provides evidence on the expansion of branch campuses in Tennessee and Texas, two states that are representative of the underlying patterns in the U.S. as a whole. As we expect the economic effect to be very localized, we use a novel and highly disaggregated proxy for regional economic activity based on daytime satellite imagery. Applying three panel estimation methods - traditional difference-in-differences (DD), heterogeneity-robust DD, and instrumental variables (IV) - we find positive associations for Tennessee and Texas in all estimations. In Tennessee, the traditional DD approach yields an increase in GDP of 1.4 percent after a campus opens (according to our most conservative estimate) and is driven by two-year branch campuses. In Texas, this effect amounts to 5.9 percent, with both two- and four-year branch campuses contributing to it. In our IV estimations, we take advantage of local taxing regulations that influence the decision to open branch campuses in certain locations but not the local economic conditions. We use this exogenous variation to estimate causal effects and find an even larger positive effect of 12.5 percent for the most conservative estimate. Given the widespread use of higher education expansion to induce economic growth, particularly in rural areas, this paper contributes important evidence on the economic impact of such campus openings on regional economic activity.
    Date: 2024–01
  5. By: Llanos Paredes, Pedro
    Abstract: This study examines the impact of the Fraunhofer Society, Europe’s largest network of applied research institutes, on patent applications. A difference-in-differences strategy was employed exploiting the establishment of five new Fraunhofer centres in the 2000s. The panel includes 65, 963 European applicants (both firms and independent inventors) between 1980 and 2019. The results show that establishing a centre increases patent output by at least 13%, robust to using applicants of cities that established a centre by the end of the 2010s as an alternative control group. The effect is driven by an increase in applicants’ productivity and not by agglomeration dynamics.
    Keywords: European Union’s Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No 860887; OUP deal
    JEL: R14 J01 J1
    Date: 2023–10–13

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