No abstract

The paper analyzes the effects of public research (publications) and research and education subsidies on regional structural strength. To this end it takes new approaches in two respects: First, we use a vector auto-regressive (VAR) model to detect reciprocal effects. Second, we introduce a new measure for structural strength based on the regions' industrial composition. We find that the effects of public research and public subsidies differ depending on the location's innovativeness. Both scientific activity and public subsidies are found to have positive effects on regional structural strength in less innovative and economically weak regions, but low or even negative effects in economically strong regions.