The paper analyses the co-operative relationships that public research institutions in Germany have developed with manufacturing firms and with each other. We find that collaboration with firms is highly concentrated on regional partners. Research institutions contribute significantly to innovation processes in the respective regions by absorbing knowledge from beyond the region and making it available to local companies. In respect of co-operation between public research institutions themselves, we find that spatial proximity still matters, but to a lesser degree.
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Christian Schwirten (1999) studied this question.