The High-Tech Offensive of the Free State of Bavaria

In 1999 the Free State of Bavaria was the first German state to introduce a state-wide cluster policy, the High-Tech Offensive, which was aimed in particular at businesses in five areas of technology. This policy measure was aimed at strengthening the infrastructure and thus the cooperation among companies, between businesses and the research sector as well as between businesses and the finance sector to bolster the innovation activity of companies. Using a difference-in-difference approach and data from the Ifo Innovation Survey, this article shows that the Bavarian policy measure has had a positive effect on the innovation activity of businesses in Bavaria. Companies in one of the five technology areas in Bavaria boosted their propensity to innovate by 5.77 percentage points because of these policy measures.