Nowadays, policy makers in charge of designing innovation policies, especially at the regional level, are more and more … innovation but also owing to a lot of other reasons, clusters are usually considered as key instruments for promoting … competitiveness, industrial development, innovation and growth. But, although cluster policies have a potential for generating …

externalities appear along the lifecycle. In a simple model, we show that it may be efficient to subsidize innovative firms in their … early stages or to protect mature firms from competition to appropriate these externalities. However, non …-benevolent politicians may not choose efficient policies. Real-world examples indicate that politicians tend to concentrate on externalities …