endogenous share opts for innovation and faces credit constraints in the subsequent expansion phase. We emphasize four results …: (i) R&D subsidies not only encourage innovation but also relax finance constraints and help innovative firms to exploit … investment of constrained firms by reducing free cash-flow and thereby discourage innovation. (iii) A revenue neutral increase in …

routinized phase where innovation takes place within top-performing incumbents; (3) a second entrepreneurial phase characterized … routinization, in which no further innovation takes place, but is instead a phase of structural change. Using data on 74 West German …

regard to the capital gains tax, innovation subsidy, public R&D spending and other policy initiatives. …

industry life cycle. The theory of knowledge spillovers, based on the knowledge production function for innovative activity …, suggests that geographic proximity matters most in industries where tacit knowledge plays an important role in the generation … of innovative activity. According to the emerging literature on the industry life cycle, tacit knowledge plays the most …

effect of the composition of economic activity on innovation. We test whether the specialization of economic activity within … a narrow concentrated set of economic activities is more conducive to knowledge spillovers or if diversity, by bringing … together complementary activities, better promotes innovation. The evidence provides considerable support for the diversity …