The focus of the article is to shed some more light on the spatial distribution of new technology-based firms (NTBF) and to discuss location factors which may contribute to the explanation of the variation in the incidence of NTBF between the West-German districts ("Kreise"). Based on theoretical models explaining the location decisions of new firms, hypotheses are derived and tested in an empirical model. The regression results indicate strong correlations between the occurrence of NTBF and the proximity to Research and Development (R&D) facilities comprising universities, technical colleges and non-university institutes as well as private R&D. As expected, the impact of the various facilities varies with respect to their field of specialization, showing major positive correlations with respect to technical disciplines. Moreover, the estimates reveal out differences due to spatial characteristics such as infrastructure and other structural factors.JEL classification: R13, R30, O18

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The paper provides an overview of some of the recent research on New Technology Based Firms in Germany and covers issues from firm formation dynamics, the regional distribution and location characteristics of NTBFs, the participation of these firms in technology transfers, and their participation in public support programmes. It has been shown that after the decline in the number of technology-based start-ups that was apparent between 1990 and 1992, there has been a small increase in the annual number of new firm formations in the high-tech industries and in technology-intensive services, but it is also apparent that, compared with the number of formations in the late 1980s, the number of firm formations in the very-high-tech manufacturing sectors has remained at a lower level since 1992. With regard to the results of analyses on the regional clustering of NTBFs and their locational considerations, one of the major findings was that the regional R&D endowment of universities, technical colleges and nonuniversity R&D-labs has a large impact on the number of new firms in the region, but that this impact also varies with the institute's field of specialisation. In contrast, the R&D activities of private firms do not appear to have an influence on the number of NTBFs in a region. The importance of the regional endowment of R&D facilities is also important with regard to technology transfer. The perceived importance of NTBFs for technology transfer and for the creation of employment is indicated by the number and the volume of public promotion schemes which are offered by federal ministries as well as by the ministries and institutions of the Bundeslaender. However, due to the huge volume and sometimes confusing complexity of the supporting schemes, a lot of small and medium-sized firms have neither the time nor money to gather and process all the available information about these programmes. Consequently, they may not apply for the support that is available at the level of the Laender, the federal level, or at the EC level. As a response to this, a reduction and simplification of the support schemes is planned in Germany. Apart from benefiting the firms, this may also benefit providers of support, including banks, by the imposition of clear standards of support. AbstractThe Importance and Contribution of new technology-based Firms (NTBFs) to long term economic development is at the center of a controversial debate. This paper provides an overview of the current status of research on various issues concerning NTBFs in Germany. The issues covered include the incidence of start-ups firms in Germany's technology-intensive sectors and their regional clustering. The review also shows that NTBFs play an important role with regard to the transfer, adoption and diffusion of technology. The public support and policy initiatives for new technology-based firms in Germany are also discussed. Acknowledgement

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