Industry Specialization, Diversity and the Efficiency of Regional Innovation Systems Volume 1 Jena Economic Research Papers 2007-06-05 2007 2007 Innovation technical efficiency patents agglomeration concentration specialization diversity regional analysis Innovation processes are characterized by a pronounced division of labor between actors. Two types of externality may arise from such interactions. On the one hand, a close location of actors affiliated to the same industry may stimulate innovation (MAR externalities). On the other hand, new ideas may be born by the exchange of heterogeneous and complementary knowledge between actors, which belong to different industries (Jacobs’ externalities). We test the impact of both MAR as well as Jacobs’ externalities on innovative performance at the regional level. The results suggest an inverted u-shaped relationship between regional specialization in certain industries and innovative performance. Further key determinants of the regional innovative performance are private sector R&D and university-industry collaboration. 2007-018 jportal_jpjournal_00000016 2007-06-05T08:29:22.650Z 2010-12-17T11:53:26.510Z