Evidence on the Geographic Concentration of German Industries: Do High-Tech Clusters Really Matter?

The agglomeration of industries has received much interest both in empirical and theoretical work in recent time. Especially in Germany politicians became inspired by the notion of high-technology industry clusters and German regional policy has seen a wave of initiatives aiming at the formation of such clusters. This papers explorers in a systematic w ay the geographic concentration of German manufacturing industries and relates it to industry characteristics and agglomeration forces proposed by theory. The main finding is that there is no general relationship between agglomeration and R&D or high-technology related business which suggests that hope put in the fast and effective development of "high-tech" clusters might be disappointed.