Regional Dynamics of Innovation: Investigating the Co-evolution of Patents, Research and Development (R&D), and Employment

Abstract

Abstract\n The paper investigates the lead-lag relationships between the growth rates of patents, R&D, and employment for German regions over the period 1999-2005. The panel dataset employed includes information on four two-digit industries. The results obtained from a vector autoregression model show that an increase in patents is associated with subsequent growth of employment in the Medical and Optical Equipment industry as well as in the Electrics and Electronics industry. With respect to the latter, growth of patents is also associated with subsequent growth of R&D. Neither of these effects can be found for the industries Chemistry and Transport equipment.