Do Cooperative Research and Development (R&D) Subsidies Stimulate Regional Innovation Efficiency? Evidence from Germany

Broekel T. Do cooperative research and development (R&D) subsidies stimulate regional innovation efficiency? Evidence from Germany, Regional Studies. The subsidization of research and development (R&D) and R&D cooperation has gained in importance in recent years. Building on a rich panel dataset, covering 270 German labour market regions and four industries, it is shown that subsidies for R&D cooperation are a suitable policy measure for stimulating the innovation efficiency of regions. The empirical findings suggest that regions with low innovation capacities benefit the most from cooperation among regional firms and subsidized links to non-regional public research institutes. The subsidization of cooperation with non-regional universities is more important for regions with large innovation capacities. Support for non-cooperative projects is related to negative effects.