THE GEOGRAPHY OF INNOVATION IN SMALL AND MEDIUM-SIZED FIRMS IN WEST-GERMANY

Since the 1980s a more micro-economic oriented view has settled the dispute between macro-economic theories over the causes of regional development. Differentiated studies revealed an unequal spatial distribution of R&D laboratories and innovating firms, and furthermore it was discovered that the innovation behaviour of firms differs between types of regions. However, these studies still left several questions unanswered. This study attempts to explain some of the regional innovation disparities in the former West Germany and to describe the factors that significantly influence the use of resources in a firm's innovation activities. Based on two samples of innovating small and medium-sized firms, the analysis confirms other studies which maintain that regional innovation disparities are more pronounced if input indicators relating to the innovation process are employed, rather than throughput or output indicators. The results also indicate that internal factors are more important for the innovation efforts of a firm than its regional environment.