Locational factors, like the quantity and quality of skilled labour, demanding customers, competitors, supporting industries, and research institutions, are assumed to have an influence on the competitiveness of a region and the performance of the regional actors. However, few studies focus on this topic from an innovation network perspective in the energy sector. Our study tries to close this gap: a sample of 128 German innovation networks of companies and research institutes in the energy sector is used to analyse the effects of locational factors on the performance (effectiveness) of innovation projects. Based on the distinctions in Porter's Diamond Model, we find that two locational factors-the quality and quantity of the demand conditions and skilled labour-have positive effects. In contrast to the widespread assumption in the literature we could not find evidence for positive impacts on the quality and quantity of the competitive environment. In fact, the effect on performance was negative.
The analysis of the importance of supply side and demand side factors with regard to innovative behavior is quite old. In this paper, these two categories are used to distinguish and examine the relevance of several success factors for collaborative innovation projects on the firm level in the German energy sector. The literature emphasizes that solving environmental problems requires extensive technological change. On the other hand, due to higher prices the market push is weaker. Regulatory factors are therefore designed to stimulate environmental innovations. The relative influence of these three categories on project performance is investigated on the basis of a sample of 128 German collaborative energy innovation projects in the development phase using a scale-based approach and structural equation modeling at the firm level. The results confirm the importance of supply side factors followed by demand side factors. In contrast to literary assumptions, R&D subsidies played no significant role.
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