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on Innovation |
| By: | Ron Boschma; Simona Iammarino; Agnieszka Olechnicka |
| Abstract: | Despite recognition that interregional and international linkages promote the innovative capacity of regions, their role in regional innovation policy has received limited academic attention, resulting in challenges on how to incorporate them effectively into policy. We argue that interregional linkages are not generic in nature but shaped by capabilities that are place- and activity-specific. This is clearly shown in the strengths and weaknesses in three types of regional collaborations – foreign direct investment, co-invention, and co-publication – that we identified across five EU regions that prioritized automotives in their regional smart specialisation strategies. Using mixed-methods, we show that regions differ in the intensity and nature of interregional linkages, depending on their capabilities. Regions with a strong knowledge base in automotives manage to build effectively a range of strong connections that allow them to tap into complementary capabilities in other regions that support innovation and upgrading, in contrast to regions with a weak absorptive capacity. Consequently, interregional linkages can only be effectively integrated into innovation policies when they are place-based and activity-specific. We argue that, in the absence of targeted incentives to foster interregional connectivity, a substantial share of its potential for local innovation and regional upgrading remains untapped. |
| Keywords: | Regional strategy, International and interregional linkages, Foreign direct investment, Global value chains, Smart Specialisation Strategy, Place-based policy |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2603 |
| By: | OKAMURO, Hiroyuki; NISHIMURA, Junichi |
| Abstract: | Public R&D support attracts both academic and practical attention. Recent studies investigate the combination of different R&D policy instruments (policy mix), focusing on R&D subsidies and tax credits (“hard support”), despite the variety of actual instruments covering “soft support, ” such as matching, mediation, and consultation services. Moreover, despite the decentralization of R&D policies in several countries, few studies have addressed place-based (city-level) R&D support with a variety of policy instruments. This study fills these gaps by estimating the effects of the local R&D policy mix, covering both hard and soft instruments, based on unique panel data of 146 Japanese cities for 18 years. Using panel fixed-effects estimations, we find that hard support has positive and significant effects on patent applications per person, while soft support significantly increases productivity. Finally, the coefficient of the interaction term of hard and soft support, estimated by the system GMM, suggests their complementarity |
| Keywords: | R&D, policy mix, place-based policy, municipality, innovation |
| Date: | 2026–03–24 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-158 |
| By: | NISHIMURA, Junichi; OKAMURO, Hiroyuki |
| Abstract: | With the progress of decentralization of policymaking since the 2000s, local innovation ecosystems have attracted worldwide attention. This study examines whether R&D support provided by diverse policy agents within a local ecosystem enhances firm innovation performance. We pay special attention to 1) a multilevel policy mix of national/prefectural and city governments, 2) a policy instrument mix of hard (financing) and soft (non-financing) support, and 3) a public-private partnership of governments and local supporters. Our estimation results based on an original firm-level survey show that R&D support from city governments, particularly soft support such as networking, advice and consultation, significantly contributes to firm innovation performance. Local supporters’ R&D support also positively impacts performance. We find significant complementarity between R&D support from city governments and local supporters. In contrast, national/prefectural R&D support shows no significant effects, and we observe no significant complementarity regarding multilevel or policy instrument mixes. We confirm that the qualitative findings from our interviews with local government officials and firms are consistent with our quantitative findings. |
| Keywords: | R&D support, place-based policy, policy mix, multilevel governance, innovation ecosystem, city |
| Date: | 2026–03–24 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-159 |
| By: | Pollitt, M. G.; Duma, A.; Covatariu, A.; Nillesen, P. |
| Abstract: | Electricity and gas distribution system operators (DSOs) are expected to play a crucial role in the energy transition. Hence, incentivizing innovation in this sector, which displays natural monopoly features, is becoming increasingly relevant. Measuring in novation is notoriously difficult, as both the inputs (funding innovative activities) and outputs (patents, publications or new adopted technologies and processes) are imprecisely measured and challenging to compare across countries. To address this, we take a text analysis approach to measuring innovation in DSOs, based on occurrences of innovation signaling words. Starting from a sample of 194 electricity DSOs and 73 gas DSOs, this paper measures innovation intensity based on DSO corporate reporting. The results are compared across different DSO characteristics like size, performance, structure, ownership and geographic location. |
| Keywords: | Distribution System Operators, Energy Transition, Innovation |
| JEL: | L94 |
| Date: | 2026–03–11 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2616 |
| By: | Nigar Hashimzade; Haoran Sun |
| Abstract: | Industrial policy has returned to the centre of economic governance, particularly in the high-tech sectors where positive network externalities in demand make market dominance self-reinforcing. This paper studies the welfare effects of an industrial policy targeting a sector with network externalities in a two-country model with strategic trade and R&D investment. We show how the welfare consequences of this policy are determined by the interaction between the strength of the externality, the type of R&D, and the degree of product differentiation between the home and the imported goods. When externalities are weak or the goods are close substitutes, the business-stealing effect produces a race to the bottom that dissipates more surplus than it creates. Under sufficiently strong externalities and weak substitutability or complementarity of the goods, industrial policy competition can make both countries simultaneously better off compared to the laissez-faire outcome because of the mutual business-enhancement effect. The case is stronger for the product innovation than for the process innovation, as the former directly affects the demand and triggers a stronger network effect than the latter which operates indirectly through the supply. Thus, network externalities create an opportunity for win-win industrial policies, but its realisation depends on the market structure and the nature of innovation. |
| Keywords: | industrial policy, network externalities, R&D subsidies, strategic trade, Cournot competition |
| JEL: | F13 H25 L13 O38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12592 |
| By: | Giendl, Clara; Schwarzbauer, Wolfgang |
| Abstract: | This paper examines how regional economic diversity shapes economic resilience across European regions during major crises. Using sectoral diversity indicators at the NUTS-2 level, we analyze the impact of diversity on three dimensions of resilience: the depth of economic downturns, the strength of the initial recovery, and the duration of recovery, focusing on the 2008 financial crisis and the COVID-19 pandemic. Our results show that higher economic diversity consistently mitigates the severity of economic shocks, reducing the immediate decline in regional economic activity in both crises. However, this stabilizing effect comes with a trade-off: More diversified regions tend to exhibit weaker short-term recovery dynamics and longer recovery periods. In contrast, regions characterized by higher innovation intensity and productivity-driven specialization recover more quickly. These findings highlight the importance of balancing structural diversity and innovation. While diversity enhances shock absorption, innovation and specialization appear crucial for accelerating recovery. The paper contributes to the literature on regional resilience by providing EU-wide evidence across multiple crises and offers policy-relevant insights on how structural economic characteristics shape regional responses to shocks. |
| Abstract: | Wirtschaftskrisen treffen Regionen unterschiedlich stark. Warum kommen manche Regionen besser durch Krisen als andere? Das EcoAustria Research Paper untersucht, welche Rolle die wirtschaftliche Struktur - insbesondere die sektorale Diversität - für die Krisenresilienz von Regionen spielt. Auf Basis von Daten für europäische Regionen analysieren wir die Auswirkungen zweier großer Krisen: der Finanzkrise 2008 und der COVID-19-Pandemie. Dabei betrachten wir drei zentrale Dimensionen der Resilienz: die Tiefe des Einbruchs, der Beginn der ersten Erholung sowie die Dauer bis zur vollständigen Erholung. Die Ergebnisse zeigen ein klares Muster: Regionen mit einer stärker diversifizierten Wirtschaftsstruktur sind besser in der Lage, wirtschaftliche Schocks abzufedern. Da ihre Wertschöpfung auf mehrere Sektoren verteilt ist, sind sie weniger anfällig für Einbrüche in einzelnen Branchen. Allerdings geht diese Stabilität mit einem Zielkonflikt einher: Diversifizierte Regionen erholen sich tendenziell langsamer, während stärker spezialisierte Regionen häufig schneller und dynamischer aus der Krise herauswachsen. Eine wichtige Rolle spielt zudem Innovation. Regionen mit höherer Innovationskraft und Produktivität weisen schnellere Erholungsprozesse auf Insgesamt zeigen die Ergebnisse: Diversität und Innovation sind beide entscheidend für Resilienz, wirken jedoch unterschiedlich. Eine ausgewogene Kombination aus wirtschaftlicher Vielfalt und Innovationsstärke kann daher einen guten Schutz vor zukünftigen Krisen bieten. |
| Keywords: | regional economics, resilience, COVID-19, Economic and financial crisis 2008 |
| JEL: | R11 R15 N41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ecoarp:340006 |
| By: | Benjamin Leroy; Davi Marim; El Ghali Benjelloun; Arthur Rozan Debeaurain; Jean-Michel Dalle |
| Abstract: | We explore a quantitative approach to emerging technological sovereignty and geoeconomic power by assessing the relative positioning of countries with economic complexity methods applied to the structure of national venture-capital (VC) portfolios and their associated Revealed Venture Advantage (RVA) metrics. Using Crunchbase firm- and deal-level data, we map venture-backed startups to 18 emerging technology domains via a probabilistic multi-label large-language-model classifier, and construct an RVA-based country-technology specialization matrix for the 17 countries with the highest aggregate VC funding. From this matrix, we derive two eigenvector-based measures: a Geoeconomic Complexity Index (GCI) that ranks countries by the composition of their venture specializations, and an Emerging Technology Geoeconomic Complexity Index (ETGCI) that ranks domains by the extent to which specialization is concentrated among high-GCI countries. Empirically, Cloud Computing, Cybersecurity Tools, and Medtech exhibit the highest ETGCI values, reflecting concentration of specialization in a small set of leading countries. The United States and Israel consistently occupy a marked "high-diversity/low-ubiquity" position and lead the GCI ranking, followed by China, France, Japan, and Germany; both country and domain rankings are stable from 2021-2024. Finally, relatedness-based simulations identify, when it exists, for each country the Simplest Single Sovereignty Enhancing Technology (SSSET), i.e., the most feasible single new technological direction associated with the largest expected improvement in relative geoeconomic positioning. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2604.09187 |