The Role of State in Regional Innovation System: An Empirical Analysis of NUTS 2 Region

The state has a regulatory role in regional innovation systems. the regulatory role of the state in systemic approach covers a variety of areas such as building habitats for innovation and entrepreneurship, promotion of clustering and supporting innovative networks. this study examines the impact of public policies such as public investment, investment subsidies and advanced technology investment in state university on regional innovation. the relation between regional innovation and public policy tools has been tested for 1999-2008 period on 20 nuts 2 regions by using panel dols (dynamic ordinary least square) method. the result showed a positive and statistically significant equilibrium relation regional innovation and public expenditure. further, investment subsidies and advanced technology investment have no significant impact on regional innovation capacity in nuts2 regions.