environmental conditions that are absent in smaller cities or remote and rural areas. Germany provides a clear counterexample to … such theories. We argue that a main force behind the geography of innovation in Germany is the country's federal tradition …

. In this process, the poorly functioning socialist system of East Germany adopted the formal institutions and organization … of West Germany, a western-style market economy. We investigate the effect of this integration on patenting activity by …, the gap between East and West Germany widened considerably over time. This divergence in innovation activity suggests that …