Ruhr Economic Papers

Ruhr Economic Papers #374

Parameters of Regional Cooperative Behavior in the German Biotech Industry – A Quantitative Social Network Analysis

by Timo Mitze and Falk Strotebeck

RUB, 10/2012, 38 S./p., 8 Euro, ISBN 978-3-86788-429-7 DOI: 10.4419/86788429



We analyse the determinants of network formation in Germany’s biotechnology industry using social network analysis combined with a regression approach for count data. Outcome variable of interest is the degree centrality of German regions, which is specified as a function of the region’s innovative and economic performance as well as biotech-related policy variables. The inclusion of the latter allows us to shed new light on the question to what extent R&D-based cluster policies are able to impact on the formation of the German biotech network. Our results show that policy indicators such as the volume of public funding for collaborative R&D activity are positively correlated with the region’s overall and interregional degree centrality. However, besides this direct funding effect, we do not observe any further (non-pecuniary) advantages such as prestige or image effects. Regarding the role played by locational factors as elements of the sector-specific and broader regional innovation system, we find that the number of biotech patent applications, the share of regional hightech start-ups and the population density among other factors are positively correlated with the region’s position in the German biotechnology network.

JEL-Classification: C21, R38

Keywords: Biotechnology; network formation; degree centrality; R&D policy