If one cluster increases local competitiveness, can politicians, by interlinking clusters, achieve an even better effect at the state level? To answer this question, the paper analyzes the "Cluster Initiative" introduced in 1999 by the Bavarian State Government. The purpose of the initiative was...

Can local industrial policies increase local firm competitiveness? Cluster-oriented policies targeted at selected industries have just such a goal and are very popular among politicians, despite the controversy surrounding these policies in academia. Thus, it would appear useful to discover if...

Can local industrial policies increase local firm competitiveness? Cluster-oriented policies targeted at selected industries have just such a goal and are very popular among politicians, despite the controversy surrounding these policies in academia. Thus, it would appear useful to discover if...

This paper analyzes the escape-entry incentive for innovation by incumbent firms. The threat posed by the possibility of leading-edge firms entering the market influences incumbent innovation. To overcome problems of endogeneity, we apply an instrumental variable approach to analyze a rich...