The paper deals with co-operative relationships of manufacturing firms in t
hree German regions. By applying a hurdle-count data model, differences bet
ween regions as well as between smaller and larger firms are analysed. The
differences between regions regarding the propensity of firms to co-operate
are mainly due to peculiarities of the small business sector. Spatial prox
imity is obviously of particular importance for horizontal co-operation and
for relationships to publicly funded research institutions. The link betwe
en the cooperative behaviour of firms and the performance of the regional i
nnovation system remains, however, unclear.