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There is an evident research gap in the literature on the geography of innovation: very little is known about the innovation activities of rural enterprises in times of crisis. The topic is addressed here by analysing space–time differences in the receipt of research, development and innovation (RDI) funding by Finnish firms before and during the COVID-19 pandemic as a major economic shock. Using firm- and municipal-level panel regression analyses, the main goal was to identify key differences and temporal changes in RDI funding patterns across different region types. The empirical results show that firms located in urban regions have been generally more successful in applying for competitive public RDI funding than firms located in rural regions, but that rural firms have caught up to their urban counterparts during the COVID-19 pandemic. This narrowing of the rural–urban RDI funding gap (1) shows that easy and flexible access to RDI funding during the COVID-19 pandemic appears to be especially attractive for small rural enterprises, (2) points to the strategic flexibility of small rural enterprises in times of crisis, and (3) indicates that the innovation capacity of these firms/regions is more resilient to economic shocks than typically thought. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic has threatened public health and socio-economic activities across societal groups and geographies. We analyse the complex interplay between epidemic and economic factors using a structural panel vector autoregressive (PVAR) approach for Danish municipalities. Findings indicate that the pandemic shock and associated public health interventions led to significant increases in unemployment rates. Wage compensations reduce regional unemployment through both a direct local effect and indirect spatial spillovers. Decomposing the unemployment rate by skill, we find that the response to an increase in wage compensations is only significant for low-skilled persons and that it is larger in urban compared with rural settings. [ABSTRACT FROM AUTHOR]

Modern cluster theory provides reasons for positive external effects that accrue from the interaction of spatially proximate firms operating in common and related fields of economic activity. In this paper, we examine the impact of R&D‐intensive clusters as a key factor of regional competitiveness on productivity growth. In relying on a hybrid approach of cluster identification, we examine effects of cluster specialization and diversity for a panel of German NUTS‐3 regions in 2003–2019. After controlling for regional characteristics and unobserved heterogeneity, a robust cluster strength effect (i.e., specialization) on productivity growth is found within the context of conditional convergence across German regions. With regard to the underlying mechanisms, we find that the presence of multiple R&D‐intensive clusters in specific technological fields is most strongly linked to higher levels of regional productivity growth. We also find that advantages from cluster specialization are strongest in key industrial sector such as automobile production, machinery, chemical and pharmaceutical products. Overall, our estimates particularly highlight the working of Marshallian externalities in productivity dynamics, while Jacobs‐type spillovers tend to be partially realized. These findings indicate that some but not all cluster‐based regional development strategies are promising policy tools to foster regional growth processes. [ABSTRACT FROM AUTHOR]