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In this paper, the authors evaluate the R&D enhancing effects of two large public grant schemes aiming at encouraging the performance of firms organized in clusters. These are Germany's well known BioRegio and BioProfile contests for which they compare the research performance of winning regions in contrast with non-winning and non-participating comparison regions. They apply Difference-in-Difference estimation techniques in a generalized linear model framework, which allows controlling for different initial regional conditions in the biotechnology related R&D activity. The econometric findings support the view that winners generally outperform non-winning participants during the treatment period, thus indicating that exclusive funding as well as the stimulating effect of being a "Winner" seems to work in the short-term.
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