Firm characteristics, location and regional innovation: A comparison between Israeli and German industrial firms

In recent years, a growing number of researchers have been attempting to ga in a better understanding of the variation in the rate of spatial innovatio n of different industrial plants. Several of these studies have investigate d the similarity and dissimilarity of spatial innovation between countries. This paper reports the results of a large study carried out jointly by a t eam of researchers from Germany and Israel. In Germany, the study focused o n Baden, the western part of the state of Baden-Wurttemberg; and in Israel, on the Northern district. Altogether in both countries, more than 400 indu strial plants belonging to the fastest-growing industrial branches (electro nics, metals and plastics) were included in the study. The use of simple st atistical models, augmented by multi-variate logit models, enabled us to po int out the similarity and dissimilarity in spatial innovation patterns in the two countries. The results support the hypothesis that expenditure on R &D is a good surrogate for the percentage of innovative firms among all fir ms in its sector, regardless of the industrial branch to which the plants b elong. In general, we can conclude that there exists a strong similarity in the frequency of industrial innovation in both countries and that the shar e of innovative firms in the high-tech industries is significantly higher t han in the traditional industries. On the other hand, the distribution of s patial variations in the share of innovative firms in Israel is greater tha n that found in Germany.