Technical Report What Shapes Local Innovation Policies? Empirical Evidence from Japanese Cities

OKAMURO, Hiroyuki  ,  NISHIMURA, Junichi

2018-03 , Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University
Increasing attention has been paid to regional innovation systems. However, previous studies have so far only focused on (the regional impact of) national policies or specific regions. To date, no studies have been carried out on the implementation and variety of local research and development (R&D) subsidy programs at the municipality level. Our research fills this gap by using information on R&D subsidy programs from local authorities in Japan collected via websites and our original survey. Our research confirms 151 R&D subsidy programs conducted by 131 cities among all cities in 2015 and investigates the determinants of the implementation and design of local R&D subsidy programs at city level (length and upper limit of subsidies, and flexibility of subsidy conditions) considering both demand- and supply-side factors. The empirical results suggest that, after controlling for city type and population size, supply-side factors including local government conditions significantly affect the implementation of public R&D subsidy programs. In contrast, we find that demand-side factors matter more for the design of subsidy programs than supply-side factors.

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