Determinants of Firm Innovation - Evidence from German Panel Data

In light of its importance of innovation on the political agenda it is necessary to provide guidance to decision makers how innovation can effectively be fostered in practice and to disentangle and evaluate the effects of the determinants suggested by the literature. This thesis focuses on the causal evaluation of three determinants of innovation that can all be influenced by politicians: cluster policies that are supposed to foster knowledge spillovers, increased competition through domestic entry in the form of spinoffs, and the availability of bank credit. <br>This thesis, for the most part, utilizes the Ifo Innovation Survey, an annual survey covering the manufacturing sector in Germany.