Ruhr Economic Papers

Ruhr Economic Papers #311

Does Cluster Policy Trigger R&D Activity? – Evidence from German Biotech Contests

by Dirk Engel, Timo Mitze, Roberto Patuelli and Janina Reinkowski

RWI, RUB, 01/2012, 29 S./p., 8 Euro, ISBN 978-3-86788-358-0 DOI: 10.4419/86788358



This paper evaluates the R&D enhancing effects of two large public grant schemes for the German biotechnology industry (BioRegio, BioProfi le). Both grant schemes are organized in the form of contents for cooperation with the goal to foster the performance of innovative firms by their organization in research clusters. We apply a Difference-in-Differences estimation technique in a generalized linear model framework, which allows us to control for different initial regional conditions in R&D activity of the biotech sector. Our econometric findings support the view that winners generally outperform non-winning participants during the treatment period, thus indicating that exclusive funding as well as the stimulating effect of being a “winner” have positive effects on R&D activity in the short-term. Apart from this direct winner effect, for the non-winning participants no beneficial indirect effect due to a mobilization of local actors during the application phase could be detected. Finally, first attempts in estimating the long-term effects of the contests for cooperation approach on the winner regions’ R&D activity in the post-treatment period show ambiguous results.

JEL-Classification: O38, C23

Keywords: Biotechnology; R&D policies; cluster; difference-in-differences estimation

Published as:

Engel, D., T. Mitze, R. Patuelli and J. Reinkowski (2013), Does Cluster Policy Trigger R&D Activity? Evidence from German Biotech Contests. European Planning Studies 21 (11): 1735-1759. DOI: 10.1080/09654313.2012.753689