Local R&D support as a driver of network diversification? A comparative evaluation of innovation policies in neighboring prefectures in Japan

This paper compares the effects of local R&D support programs on firm performance between neighboring three prefectures in the same district in Japan. Particularly, we evaluate the policy effect on regional and sectoral diversification of transaction networks. One of these prefectures, A, has a large industrial agglomeration around world-leading manufacturers, which is not the case for the other prefectures, B and C. Empirical evaluation based on firm-level dataset available through TDB-CAREE shows that the programs in Prefectures B and C promoted market development of recipient firms in unexplored sectors or regions, whereas Prefecture A’s program did not.Teikoku DataBankThis research was financially supported by JSPS KAKENHI Grant Number 18J2039253 p