Is Regional Innovative Activity Path-dependent? An Empirical Analysis for Germany

Based on a standard idea-based model of endogenous growth we test the hypothesis that regional innovative activity is path-dependent, and investigate the geographical scope of knowledge spillovers. Using data for West-German regions, two alternative indicators of the stock of knowledge are specified. One is based on patent applications, the other on numbers of researchers. With patents as indicator the path-dependence hypothesis is rejected, and knowledge spillovers from neighboring regions appear to be irrelevant. With numbers of researchers as indicator, by contrast, there is evidence for both path-dependence, and the relevance of interregional knowledge spillovers. Several extensions and refinements are discussed which may help resolving these apparent contradictions.