Catherine Lecocq
email: catherine.lecocq@econ.kuleuven.be

Bart Leten
email: bart.leten@econ.kuleuven.be

Jeroen Kusters
email: jkusters@deloitte.com

Bart Van Looy
email: bart.vanlooy@econ.kuleuven.be

Do Firms Benefit from Being Present in Multiple Technology Clusters? An

Keywords: Cluster, Innovation, Biotechnology. JEL classification: O30, R12 and R30

published or not. The documents may come

 [START_REF] Audretsch | R&D spillovers and the geography of innovation and production[END_REF]FELDMAN and FLORIDA, 1994). According to [START_REF] Marshall | Principles of economics[END_REF], presence in clusters enhances the innovative capacity of firms through the presence of localized knowledge spillovers, and the access to a pool of highly-skilled labor and specialized suppliers that agglomerate in such regions. Innovation dynamics in clusters are further stimulated by the presence of local competition and peer pressure among firms [START_REF] Porter | The Competitive Advantage of Nations[END_REF]. Empirical studies stemming from the economic geography literature indeed provide evidence that firms located in clusters are more innovative than counterparts located elsewhere [START_REF] Baptista | Do Firms in Clusters Innovate More[END_REF][START_REF] Baten | What made southwest German firms innovative around 1900? Assessing the importance of intra-and interindustry externalities[END_REF][START_REF] Beaudry | Are Firms in Clusters Really more Innovative[END_REF][START_REF] Deeds | Dynamic capabilities and new product development in high technology ventures: an empirical analysis of new biotechnology firms[END_REF]; [START_REF] Van Geenhuizen | Does a clustered location matter for high-technology companies' performance? The case of biotechnology in the Netherlands[END_REF]. At the same time, little is known about the relationship between presence in multiple clusters and the overall technological performance of firms. Exploring this relationship is relevant because firms increasingly organize R&D activities on an international scale whereby knowledge from different regions is being accessed.

(GASSMAN AND VON ZEDTWITZ, 1999;KUEMMERLE, 1997;[START_REF] Granstrand | Internationalisation of corporate R&D: A study of Japanese and Swedish corporations[END_REF]. In this paper, we engage in such an analysis by means of a panel dataset of 59 biopharmaceutical firms (period 1995-2002). The focus of the paper is on the relationship between the technological performance of consolidated firms (i.e. the parent firm and its subsidiaries) and the number of technology clusters in which they engage in technological activities. Clusters are identified as regions within the United States, Europe and Japan with a critical mass of technological activities in the field of biotechnology. Whereas previous economic geography studies controlled only to a 4 limited extent 1 for the heterogeneity of firms in terms of innovative efforts and capabilities, this study uses fixed effect panel data techniques and includes controls for time-varying firm differences in R&D expenditures and past experience. This allows to distinguish cluster presence from other firm-specific characteristics [START_REF] Beugelsdijk | The regional environment and a firm's innovative performance: A plea for a multilevel interactionist approach[END_REF]. The analyses provide evidence of an inverted-U shape relationship between the number of technology clusters in which a firm is present and its overall technological performance. This effect is distinct from a mere multilocation effect.

The remainder of the paper is organized as follows. First, an overview of prior research on clusters and firm performance is provided, resulting in hypotheses on the relationship between cluster presence and firm's technological performance. Next, the data sources and variables used in this study are presented, followed by the empirical results. Conclusions, limitations and directions for further research are discussed in the final section.

INDUSTRY AND TECHNOLOGY CLUSTERS

The clustering of industrial activity in well-defined and relatively small geographic areas has been observed for a long time by economic geographers and regional scholars (e.g. [START_REF] Marshall | Principles of economics[END_REF][START_REF] Krugman | Increasing returns and economic geography[END_REF][START_REF] Porter | The Competitive Advantage of Nations[END_REF]. Famous examples of industrial clusters include Detroit's car manufacturing industry, the entertainment industry of Hollywood and the fashion industry in northern Italy. Clustering remains a striking feature of national and regional economies, despite the availability of better transportation and communication infrastructure and the presence of global markets from which capital, talent and technology can be sourced [START_REF] Porter | Clusters and the new Economics of Competition[END_REF]2000). JOHN and POUDER, 2006). Value dynamics in technology clusters or "technology districts" build on unique technological resources -the technological infrastructure -which supports firms' innovation activities (FELDMAN and FLORIDA, 1994;[START_REF] Storper | The Limits to Globalization: Technology Districts and International Trade[END_REF]. Sources of knowledge in technology clusters are diverse, ranging from universities and public research institutes to firms, suppliers and customers. [START_REF] Marshall | Principles of economics[END_REF] highlighted three incentives for firms to cluster geographically: (i) broader access to specialized, highly-skilled labor; (ii) access to specialized suppliers; and (iii) the presence of inter-organizational knowledge spillovers among similar firms 2 . The broad concept of knowledge spillovers is probably the most frequently invoked source of agglomeration economies [START_REF] Head | Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States[END_REF] and has been widely investigated in the literature (e.g. DÖRING and SCHNELLENBACH, 2006;[START_REF] Breschi | Knowledge spillovers and local innovation systems: a critical survey[END_REF]. Knowledge spillovers arise through labor mobility [START_REF] Almeida | Localization of Knowledge and the Mobility of Engineers in Regional Networks[END_REF] and exchange processes involving competitors, suppliers, customers and providers of professional services (VON HIPPEL, 1988;[START_REF] Rosenkopf | Overcoming Local Search through Alliances and Mobility[END_REF]. They allow firms to achieve similar R&D results faster and/or with fewer resources. Empirical work has shown the existence and geographically bounded nature of knowledge spillovers [START_REF] Jaffe | Geographic localization of knowledge spillovers as evidenced by patent citations[END_REF][START_REF] Almeida | Localization of Knowledge and the Mobility of Engineers in Regional Networks[END_REF][START_REF] Varga | Local academic knowledge spillovers and the concentration of economic activity[END_REF][START_REF] Rodríguez-Pose | Research and Development, Spillovers, Innovation Systems, and the Genesis of Regional Growth in Europe[END_REF]. Spillovers are more local to the extent that the relevant knowledge base is tacit [START_REF] Polanyi | The tacit dimension[END_REF][START_REF] Nonaka | A dynamic theory of organizational knowledge creation[END_REF][START_REF] Von Hippel | Sticky information and the locus of problem solving: Implications for innovations[END_REF]. This is particularly true for emerging, complex technologies like biotechnology. [START_REF] Porter | The Competitive Advantage of Nations[END_REF][START_REF] Porter | Clusters and the new Economics of Competition[END_REF] provided two additional reasons why firms located in clusters are more innovative than firms located outside clusters. First, opportunities for innovation (both new buyer needs and new technological opportunities) are more visible in clusters. Next, competitive and/or peer pressure among local firms stimulates firms to be more innovative and increases the efficiency of their operations.

While clusters are often associated with positive effects on firm performance, potential disadvantages can be noticed as well. First, resources (e.g. labor, real estate, professional services) might be significantly more expensive in clusters due to congestion effects [START_REF] Beaudry | Are Firms in Clusters Really more Innovative[END_REF]. Second, cluster membership might lead to an inward orientation whereby relevant developments situated outside the cluster are neglected [START_REF] Porter | Clusters and the new Economics of Competition[END_REF]. Firms located in clusters might also be confronted with higher levels of unintended (outward) knowledge spillovers, affecting the firm's competitive advantage in a negative way [START_REF] Shaver | Agglomeration economies, firm heterogeneity, and foreign direct investment in the United States[END_REF].

While such disadvantages might occur, they are not directly relevant for the research questions addressed in this paper as the focus is on the firm's technological performance (as opposed to the overall competitive position of the firm or the efficiency implications of being present in clusters).

CLUSTERS AND FIRM PERFORMANCE

The capacity of firms to innovate is not limited to the boundaries of the firm but increasingly depends on external resources that agglomerate in specific places (FELDMAN and FLORIDA, 1994;[START_REF] Storper | The Limits to Globalization: Technology Districts and International Trade[END_REF]. If knowledge spillovers are an cluster should manifest themselves in the first place on the innovative output of firms rather than on the firm's financial or growth performance [START_REF] Baptista | Do Firms in Clusters Innovate More[END_REF]. Studies in the economic geography literature have investigated whether firms (plant level) located in an industrial or technology cluster are more innovative than firms outside clusters 3 . These studies can be classified in two groups based on the methodologies used to measure clusters.

A first set of studies investigated whether firms located in industrial clusters are more innovative. The concentration of industrial activity in a region is measured by sector level employment data. BAPTISTA and SWANN (1998) found a positive effect of own sector employment in the region, on the likelihood of manufacturing firms in the United Kingdom to innovate. In contrast, [START_REF] Beaudry | Are Firms in Clusters Really more Innovative[END_REF] found no effect of own sector employment on firms' innovative performance for a sample of UK and Italian firms. Only the concentration of innovative firms (and the size of their accumulated knowledge base) in the own industry had a positive impact on the technological performance of firms. Similar results were found in the study of [START_REF] Baten | What made southwest German firms innovative around 1900? Assessing the importance of intra-and interindustry externalities[END_REF] for firms trading in the state of Baden (Germany) around 1900. These findings suggest that for firms' innovative performance, the presence of critical mass in terms of knowledge creation activities in a region is more important than the overall industrial activity per se.

A second set of studies classified regions in clusters and non-clusters based on the amount of technological activity observed in the region, and examined whether firms located in technology clusters are more innovative than firms located elsewhere. [START_REF] Deeds | Dynamic capabilities and new product development in high technology ventures: an empirical analysis of new biotechnology firms[END_REF] For the Netherlands, [START_REF] Van Geenhuizen | Does a clustered location matter for high-technology companies' performance? The case of biotechnology in the Netherlands[END_REF] defined clusters as regions with at least one knowledge institute and 10 young entrepreneurial biotechnology firms. Their analyses showed no significant effect from cluster location on the innovativeness of biotechnology firms. However, when only the largest and oldest biotechnology cluster in the Netherlands -the Leiden region -is considered, cluster presence had a significant positive effect on firm performance. These results, again, suggest that a critical mass of technological activity is needed before positive cluster effects can be observed at level of the firm.

Aforementioned economic geography studies use cross-sectional data at the level of single plants to investigate whether clusters are supportive to firms' innovation activities. While the results indicate that firms in clusters are more innovative than firms located elsewhere, they do not provide evidence whether firms can improve their technological performance by extending their presence within multiple clusters. This research question is addressed in this paper. More specifically, the relationship between the number of technology clusters in which a firm is present and its overall technological performance is studied. Exploring this relationship is relevant because firms increasingly organize R&D activities within multiple unitslocated in different regions -to benefit from agglomeration externalities (GASSMAN and VON ZEDTWITZ, 1999;KUEMMERLE, 1997;[START_REF] Granstrand | Internationalisation of corporate R&D: A study of Japanese and Swedish corporations[END_REF][START_REF] Cantwell | Recent location of foreign-owned research and development activities by large multinational corporations in the European regions: The role of spillovers and externalities[END_REF]. In so doing, R&D location choices are not confined to national borders, but increasingly take place on a global scale. As such, empirical analyses assessing the impact of cluster presence should not be limited to one particular country or region, but should consider technology clusters on a more global scale. Likewise, on the firm level, studying the impact of cluster presence requires taking into account the location of all firms' R&D facilities (headquarters and subsidiaries).

In this paper, such an analysis is performed by means of a panel dataset consisting of the technological activities of 59 biopharmaceutical firms (1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002).

In line with economic geography studies, locations of firms' R&D activities (including cluster presence) are analyzed at the regional level. Technology clusters are defined as worldwide leading regions in technology development. The models in this study control for firm-level heterogeneity in innovative efforts and capabilities by employing fixed effects panel data techniques and including time-varying, firm-level control variables (R&D expenditures and innovation experience). This allows to clearly distinguish between cluster presence and other, firm-specific, characteristics [START_REF] Beugelsdijk | The regional environment and a firm's innovative performance: A plea for a multilevel interactionist approach[END_REF].

A positive effect on a firm's overall technological performance is expected from being present in multiple clusters, as this coincides with an increased access to state-of-the-art knowledge available within each of these regions. At the same time, the more one is already involved in different clusters, the smaller the additional effects in terms of access to new, relevant knowledge might become. In addition, the costs of coordinating multiple R&D units and leveraging and integrating knowledge from multiple locations will increase with the number of locations in which a firm is present. Building on the aforementioned research, it is expected that location benefits will principally stem from being present in technology clusters with a critical mass of relevant knowledge. Therefore, the effects of cluster membership on the overall technological performance of firms should be distinctive from a mere multiple location effect. Taken together, these arguments lead to the following set of hypotheses: [START_REF] Pavitt | Patent statistics as indicators of innovative activities. Possibilities and problems[END_REF][START_REF] Griliches | Patent statistics as economic indicators -a survey[END_REF]. They are easy to access, cover long time series and contain detailed information on the technological content, owners and inventors of patented inventions. This allows to mark out biotechnology patents, construct indicators of the technological performance of firms and regions, and identify the locations where inventions took place. At the same time, patent indicators also have some deficits: not all inventions are patented, patent propensities vary across industries and firms, and patented inventions vary in technical and economic value [START_REF] Mansfield | Patents and innovation: an empirical study[END_REF]GAMBARDELLA et al, 2008). One can lessen these problems by restricting patent analyses to technologies with high propensities to patent such as biotechnology [START_REF] Arundel | What percentage of innovations are patented? Empirical estimates for European firms[END_REF], and by [START_REF] Hall | Market value and patent citations[END_REF][START_REF] Trajtenberg | A penny for your quotes: Patent citations and the value of innovations[END_REF][START_REF] Harhoff | Citation frequency and the value of patented inventions[END_REF]. Despite their shortcomings, there is simply no other indicator that provides the same level of detail on firms' technological activities as patents do [START_REF] Griliches | Patent statistics as economic indicators -a survey[END_REF]. Further, studies have found a strong correlation between patent counts and other technology indicators (e.g. new product announcements and expert opinions) on the level of firms [START_REF] Hagedoorn | Measuring innovative performance: is there an advantage in using multiple indicators[END_REF][START_REF] Narin | Patents as indicators of corporate technological strenght[END_REF] and regions [START_REF] Acs | Patents and innovation counts as measures of regional production of new knowledge[END_REF], establishing patents as a valid indicator of novel technological activity.

In this study, patent indicators are based on data from the European Patent Office (EPO). Patent application data rather than patent grants are used because of the extensive time periods observed between application and granting decisions at the European Patent Office (especially for biotech) 4 . The geographic location of inventions is identified via inventor address information [START_REF] Lecocq | Data Production Methods For Harmonized Patent Statistics[END_REF].

Allocation based on inventor addresses is the most commonly used approach in patent studies since -especially for large firms -allocation based on assignee addresses might signal the location of corporate headquarters rather than the research laboratory where the invention took place [START_REF] Deyle | Commuters and the regional assignment of innovative activities: A methodological patent study of German districts[END_REF][START_REF] Khan | Global overview of innovative activities from patent indicators perspective[END_REF].

The use of inventor addresses may however also introduce some bias since inventors For this sample of 59 biopharmaceutical firms, patent data were collected at the consolidated parent level, i.e. comprising headquarters and all majority-owned (share > 50%) subsidiaries of the parent firm. This consolidation process implied the mapping of all changes in the group structure of the parent firms due to acquisitions, mergers, green-field investments and spin-offs during the period 1995 to 2002. For this purpose, yearly lists of subsidiaries included in annual reports were used, as well as yearly 10-K reports filed with the SEC in the United States and, for Japanese firms, information on foreign subsidiaries published by Toyo Keizai in the yearly Directories of Japanese Overseas Investments. Using consolidated patent data is important to get a complete picture of firms' technological activities as a significant part of large firms' patents are not filed under the parent firm name (LETEN et al,

Biotechnology Clusters

Biotechnology is a knowledge-intensive technology field, which from its origin has developed within a limited number of regions, such as California and the Boston area in the United States, and Cambridge in the United Kingdom. To identify biotechnology clusters worldwide, the aforementioned dataset with all EPO patent applications in the field of biotechnology is used (Glänzel et al., 2004). The dataset shows that, for the period 1990-1999, almost all patenting activity in the domain of biotechnology (94%) takes place in the United States, Europe (EU-15 and Switzerland) and Japan. No other region has sufficient patent applications to qualify as a cluster.

In this study, the focus is on regions in the United States, Europe and Japan. It is important to select a spatial level of analysis which is comparable across continents in terms of size (population). Regions are therefore defined at the level of the following national subdivisions: European NUTS 1 regions (n=73), US states (n=50), and Japanese prefectures (n=47) 6 . Cluster boundaries do not necessarily coincide with the boundaries of such administrative regions. Clusters may well spread over more than one region (e.g. the tri-state cluster in the states of New York, New Jersey and Pennsylvania and the cluster covering the prefectures of Tokyo and Kanagawa).

Alternatively, regions may enclose more than one cluster (e.g. the triangle San Francisco -San Jose -Sacramento, better known as Silicon Valley, and the region between Los Angeles and San Diego in the state of California). Despite these concerns, an analysis of regions coinciding with the boundaries of the administrative subdivisions was chosen, as they provide comparable regional units of analysis. - -----------------------------Insert Table 1 about here ------------------------------ The dependent variable in the study is the technological performance of firms in biotechnology. This is measured by the number of biotech patent applications of a firm in a certain year, weighted by the number of forward patent citations received over a fixed four year time window 7 . The 'weighting' is done to account for variation in the technological and economic importance of patented inventions [START_REF] Albert | Direct validation of citation counts as indicators of industrially important patents[END_REF][START_REF] Harhoff | Citation frequency and the value of patented inventions[END_REF][START_REF] Trajtenberg | A penny for your quotes: Patent citations and the value of innovations[END_REF][START_REF] Hall | Market value and patent citations[END_REF]

8 .
The dependent variable is a count variable with only non-negative integer values. In this case, non-linear count data models are preferred to standard linear regression models as the former explicitly take into account the non-negativity and discreteness of the dependent variable [START_REF] Cameron | Regression analysis of count data[END_REF]. Negative binomial models used in the study allow for overdispersion in the dependent variable.

To control for the presence of unobserved firm-specific effects (which may correlate with, and bias the effect of explanatory variables in the models, if not controlled for), fixed effects panel data estimators are used. This estimation technique removes (time constant) unobserved firm-specific factors by time-demeaning all variables (dependent and explanatory) before performing regressions (WOOLDRIDGE, 2001).

Presence in Technology Clusters

To identify the regions in which firms are present, inventor address information on the biotechnology patents of the firms is used. More specifically, a firm is considered to engage in biotechnology R&D activities in a region if the firm owns patents with at least two inventors residing in that region during the last two years. Given the fact that in which a firm is present through its fully owned or single parent patents. For coowned patents, i.e. patents with multiple assignees from different parent organizations, it is not possible to identify to which assignee an inventor belongs.

Therefore using inventor address information on such patents may not only pick up a firm's own R&D locations, but also the R&D locations of co-assignees. It should be noted that our R&D location variable, even after correcting for co-assigneeship, might contain additional locations through the location of co-inventors not belonging to the firm. This is for instance the case when a firm engages in collaboration with a university or other organization, while retaining full ownership of the IP. The location variable will then be overestimated, however, only to the extent that the firm is collaborating with at least two inventors that are located outside the firm's own region. Despite this shortcoming, patent data are the best available public source to systematically map the biotech R&D locations of global firms. Other sources of information such as corporate annual reports also show some limitations: they often do not specify the exact location (region) of firm facilities and the type of activities (e.g. research, production, administration, sales) undertaken at different locations.

Corporate annual reports also do not provide information on the type of research activities (biotechnology versus other research fields) in R&D establishments. This is however important information, as we study the locations where firms engage in biotech R&D activities. in which a firm is present, (ii) "other regions", reflecting the number of other regions, not defined as clusters, in which a firm undertakes R&D activities, and (iii) "countries", the number of countries in which a firm is present 10 . To test for nonlinear relationships between the R&D location variables and the firm's overall technological performance, both linear and squared terms of the location variables are included in the empirical models. Applying fixed effect panel data models require that there is enough within-firm variation in the number of R&D locations over time. This is the case for the sample firms, as they all engaged in M&A activities, opened new laboratories and/or closed down existing ones over the time period 1995-2002.

Control Variables

Several (time varying) variables that might affect the technological performance of firms are included as control variables in the analyses. First, an indicator for the size of a firm's existing technology portfolio in biotech is included, measured by the number of biotech patents applied for by the firm in the last 5 years. In analogy to the dependent variable, this variable is weighted by the number of forward patent citations received over a fixed four year time window to account for differences in patent quality. Firms with large technology portfolios are more experienced in innovation, and may be better positioned to develop new technological competences [START_REF] Saviotti | Coherence of the knowledge base and the firm's innovative performance: Evidence from the US pharmaceutical industry[END_REF]. In previous studies, a time period of 5 years has been considered as appropriate for assessing the validity of knowledge bases in a given technology [START_REF] Stuart | Local search and the evolution of technological capabilities[END_REF][START_REF] Ahuja | Entrepreneurship in the large corporation: a longitudinal study of how established firms create breakthrough innovations[END_REF][START_REF] Leten | Technological diversification, coherence and performance of firms[END_REF]. Second, differences in the size of firms' R&D effort are included, measured by - ----------------------------------------Insert Table 2 about here - -----------------------------------------EMPIRICAL RESULTS

The results of the fixed effects negative binomial models on the relation between cluster membership and firms' overall technological performance are presented in Table 3. Model 1 includes only the control variables. Both the lagged biotech patent portfolio and the R&D expenditure variable are positive and significant. In model 2, the "clusters" variable is introduced, which indicates the number of clusters in which a firm is involved when developing R&D activities. The cluster variable is positive and significant, indicating that firms can enhance their technological performance by extending their R&D activities in multiple technology clusters (confirming hypothesis 1). In model 3, the "other regions" variable is added to the set of control variables, reflecting the number of regions, outside clusters, in which a firm develops R&D activities. This variable is not significant. The log likelihood ratio test reveals that including the other regions variable does not add significantly to the explanatory power of the model (Chi 2 LR test = 1.89, p=0.17). Model 4 includes both the "clusters" and "other regions" variables. A positive and significant coefficient is found for the "clusters" variable, while the coefficient for the "other regions" variable remains insignificant. Together, the findings from models 2 to 4 suggest that it is the presence in technology clusters, and not in other regions, that influences the technological performance of firms.

- ----------------------------------------Insert Table 3 about here ------------------------------------------Model 5 is the most complete model and includes, besides the linear terms, also the quadratic terms of the "clusters" and the "other regions" variables. Including quadratic terms allows to check for non-linear relationships between the location variables and firm performance. The log likelihood ratio test indicates that model 5 significantly adds to model 4 in terms of explanatory power (Chi 2 LR test = 7.43, p=0.02). The "clusters" variable has a positive and significant linear term, and a negative and significant quadratic term. This confirms hypothesis 2: there is an inverted U-shape relationship between the number of technology clusters in which a firm engages in R&D activities and the firm's total technological performance. The coefficients of the "clusters" variables in model 5 further indicate that biopharmaceutical firms should -ideally -be present in 4 biotechnology clusters.

Since the average biopharmaceutical firm in the sample is present in less than 2 biotech clusters, most firms can still improve their technological performance by setting up R&D activities in additional biotechnology clusters 12 . In line with previous In model 6, an additional regression is performed to verify whether the cluster effect is distinctive from a mere R&D internationalization effect. Therefore, the linear and quadratic term of the countries variable, reflecting the number of countries in which a firm is present, are added to the initial model. The "countries" variables are not significant, and the model does not significantly improve compared to the model containing only the control variables (Chi 2 LR test = 1.57, p=0.46). This again confirms that presence in multiple technology clusters and not the mere presence in multiple locations, is contributing to the firms' overall technological performance. [START_REF] Baptista | Do Firms in Clusters Innovate More[END_REF][START_REF] Beaudry | Are Firms in Clusters Really more Innovative[END_REF][START_REF] Deeds | Dynamic capabilities and new product development in high technology ventures: an empirical analysis of new biotechnology firms[END_REF]; [START_REF] Van Geenhuizen | Does a clustered location matter for high-technology companies' performance? The case of biotechnology in the Netherlands[END_REF][START_REF] Baten | What made southwest German firms innovative around 1900? Assessing the importance of intra-and interindustry externalities[END_REF]. However, so far, little is known about the impact of presence in multiple clusters and regions on the technological performance of multilocation firms.

In this study, such an analysis is performed, based on a panel dataset of the largest biopharmaceutical firms -in terms of technological output -in biotechnology.

The companies have headquarters in the United States, Europe or Japan, and engage in biotech R&D activities in different locations worldwide. Clusters are defined as worldwide leading regions in terms of technology development in the field of biotechnology. Over the time period under study (period 1995-2002), most of the firms in our sample extended and/or contracted their presence in technology clusters and other regions. In the analyses, firm-fixed effect regression techniques and controls on time-varying changes in R&D efforts and past innovation experience of firms are used to account for firm-level differences in size and innovative capabilities. The findings suggest that biopharmaceutical firms can enhance their technological performance by developing R&D activities in multiple technology clusters. The results also reveal that boundaries exist in terms of the net beneficial effects of The analyses provide evidence that the cluster effect is distinctive from a mere multi-location effect: the presence in technology clusters, and not the presence in multiple regions and countries, is contributing to a better technological performance of firms. As such, the study provides interesting insights for the R&D internationalisation literature. Recently, this stream of literature started to investigate the relationship between the geographical dispersion of firms' R&D activities and firm performance. Some studies [START_REF] Singh | Distributed R&D, cross-regional knowledge integration and quality of innovative output[END_REF]FURMAN et al, 2005) found negative effects, while other studies [START_REF] Criscuolo | The impact of internationalization of research on firm market value[END_REF][START_REF] Iwasa | Overseas R&D, knowledge sourcing and patenting: an empirical study of Japanese R&D investments in the US[END_REF][START_REF] Penner-Hahn | Does international research and development increase patent output? An analysis of Japanese pharmaceutical firms[END_REF][START_REF] Todo | Overseas R&D activities and home productivity growth: evidence from Japanese firm level data[END_REF] reported positive effects of geographical dispersion on firms' performance. These studies did not take into account the technological characteristics of regions in which R&D activities are deployed (clusters or non-cluster regions). This may be one factor explaining the mixed results reported so far.

At the same time, the observed findings imply limitations as well. First, our sample consists of firms with large biotech patent portfolio's and, consequently, the results apply to this type of technology-active biopharmaceutical firms only. Further research could investigate whether smaller firms in terms of biotech technology development activities -e.g. entrepreneurial ventures -, also benefit from being Within this study, the focus was on regional technological capabilities within the same field (biotechnology); as such, a natural extension of the research reported here implies an examination of 'Jacobs' externalities as well. Regions do not only differ in terms of biotechnology capabilities but also with respect to the presence of technological activities within other, related and unrelated, fields. Studying the impact of technological variety in regions on the technological performance of firms, as well as the number of regions needed to access such variety, is an interesting avenue for further research. Closely related, one could study the relative importance of fieldspecific regional capabilities (MAR externalities) and technological variety (Jacobs GLAESER et al, 1992;FELDMAN and AUDRETSCH, 1999;[START_REF] Henderson | Industrial-Development in Cities[END_REF][START_REF] Beaudry | Who's right, Marshall or Jacobs? The localization versus urbanization debate[END_REF]FRENKEN et al, 2007).

3 Other studies (ex. [START_REF] Hill | The Effect of Location on the Performance of High Technology Firms[END_REF]SWANN and[START_REF] Swann | A comparison of the dynamics of industrial clustering in computing and biotechnology[END_REF][START_REF] Hendry | Dynamics of clustering and performance in the UK opto-electronics industry[END_REF]BROWN, 2006) have studied the impact of cluster location on the financial performance and growth of firms. 4 We calculated that for EPO biotechnology patents applied for in 1995 and granted by 2006, only 40% of the patents were granted within 6 years after application.

  especially in knowledge-intensive industries, display a tendency to cluster geographically

Following

  the success of Silicon Valley in California and Route 128 in Boston 1994), there has been a wide interest of researchers and policy makers in the innovative and economic potential of technology clusters. Unlike industry-focused clusters, where inter-firm connections are predominantly vertical, technology clusters exhibit a more lateral structure consisting of direct and indirect competitors developing diversified applications of the same core technology within different markets or industries (ST.

  clusters, the beneficial effects from being present in a

  clusters are more innovative than firms located outside the clusters.

  Firms improve their technological performance when extending their presence in technology clusters. Hypothesis 2: Firms extending their presence in technology clusters will gain additional benefits in terms of technological performance, albeit of a diminishing nature (inverted U-shape relationship). Hypothesis 3: The relationship between cluster membership and overall technological performance is distinct from a mere multi-location effect. DATA AND METHODOLOGY Panel data on the technological activities of 59 biopharmaceutical firms with parent firms located in the United States, Europe and Japan, have been collected to study the relationship between the location of R&D activities in multiple clusters and regions and the overall technological performance of firms. Patent data are used to create indicators of firms' technological activities (location and performance) and to identify biotechnology clusters within the United States, Europe and Japan . The use of patent data has several advantages

  counts (technological performance indicator) by the number of forward citations received

  may not live in the same region as they work.[START_REF] Landoni | Localization of innovative activities: Myths and facts of methodologies to assign patents to spatial areas[END_REF] performed a validation exercise where both allocation methods (inventor and applicant addresses) are compared with the real R&D locations of inventions. This work confirmed the superiority of the inventor's address criterion, for patent statistics at a fine-grained geographical level.

  Parent firms with a large biotech patent portfolio are identified from a dataset with all EPO patent applications in the field of biotechnology(time period 1978-2001). This dataset is the result of a study byGLÄNZEL et al. (2004) that delineates technological activity in the field of biotechnology 5 . The selected firms are active in different sectors: mostly in biotechnology, the pharmaceutical or chemical industry, but the list of parent firms also includes producers of consumer products, energy concerns and breweries. For consistency of the sample, only the biopharmaceutical firms (75 largest patenting firms) were retained. Due to missing data on firm R&D expenditures or incomplete information on the group structure of parent firms, the list of firms was further reduced to 59 biopharmaceutical firms. All these firms have headquarters in the United States, Japan or Europe (EU-15 and Switzerland). Appendix 1 contains a complete list of the firms under study.

  Firm financial data are also collected at the consolidated firm level via corporate annual reports, Worldscope and Compustat financial databases.

  biotechnological R&D activities in a region is measured by the number of EPO patents in that region during the period 1990-1999. Patent applications are allocated to regions based on inventor addresses. When a patent contains multiple inventors in different regions, the patent is fully counted in each region. Table1shows the 50 regions with the highest technological performance in the field of biotechnology. A region is defined as a biotechnology cluster if it contains at least 2.5% of the total number of EPO patent applications in the field of biotechnology. Twelve regions satisfy this condition. Together they account for 50% of biotechnology patents worldwide. Most biotechnology clusters are located in the United States, with a clear supremacy of the state of California which accounts for almost 15% of all biotechnology patents. Other US regions with a substantial amount of activity in biotechnology are Massachusetts, Maryland, Pennsylvania, New York and New Jersey. Europe has three top regions: the region of Paris (France) , the region of Cambridge, Bedfordshire, Hertfordshire and Essex (East Anglia. United Kingdom) and the region of Munich (Bayern, Germany). With Tokyo, Kanagawa and Osaka, Japan counts three top regions in biotechnology.

  quite widespread in the field of biotechnology (LECOCQ and[START_REF] Lecocq | The impact of collaboration on the technological performance of regions: time invariant or driven by life cycle dynamics? An explorative investigation of European regions in the field of Biotechnology[END_REF] 9 , it was decided to consider presence in a region only on the firm's fully owned patents, thus reflecting the number of regions (clusters and other regions)

  to the location of the biotechnology R&D activities of a firm are created: (i) "clusters", reflecting the number of R&D biotechnology clusters

  lagged R&D expenditures11 . Firms that have more R&D resources, are expected to have a higher technological performance. Third, year dummies are included in the models to control for changes over time in the propensity of firms to patent.Descriptive statistics and correlation coefficients for the dependent and explanatory variables are reported in table 2. The mean (yearly) number of citationweighted patents for the firms in the sample is 21, and firms' average R&D expenditures amount to 452 million US dollars a year. The sample firms are, on average, present in 1.8 biotechnology clusters and 2.4 other regions, spread over 2 countries. None of the reported correlations are excessively high.

  significant effects are found for the "other regions" variables in model 5 (confirming hypothesis 3).

  knowledge-intensive fields such as biotechnology, are increasingly developing global R&D activities with location choices for an important degree being determined by the presence of local technological capabilities. Studies in the economic geography literature have shown that firms located in regions where technological activities agglomerate (technology clusters), are more innovative than firms located elsewhere

  over multiple locations. When the number of clusters in which a firm is engaged becomes too large, increasing costs in terms of coordinating and integrating geographically dispersed R&D units might start to prevail over the marginal benefits from getting access to new, relevant knowledge. At the same time, the observed diminishing effects might also be caused by insufficient critical mass in terms of technological activity (economies of scale and scope) when R&D activities become dispersed.

  multiple) technology clusters. Next, to retrieve the locations in which firms develop biotechnology research activities, inventor addresses on the firms' fully owned patents are used. While we corrected for co-assigneeship, the derived R&D location variables might still reflect locations of co-inventors not belonging to the firm. This is notably the case when a firm engages in collaboration with a university or other organization, while retaining full ownership of the resulting inventions.Ideally, the locations where firms have R&D establishments (R&D labs) should be distinguished from locations where firms are present through other collaboration modes, such as R&D collaborations or sponsoring of research at universities and public labs. This requires conducting a firm survey since corporate annual reports do not provide sufficiently detailed information on the type and exact location of the research activities (biotechnology versus other fields) performed by firms.

  externalities) in regions for the technological performance of firms. A final suggestion for further research implies the micro-dynamics underlying the observed positive performance effects from presence in multiple technology clusters. While the findings are interesting within the framework of R&D location decisions, identifying the most e.g. collaboration with local firms and/or research institutes, technology acquisition, researcher mobility, establishment of fully owned research labs) through which firms can benefit from agglomeration externalities in technology clusters might be highly relevant to ensure that firms yield results once location decisions have been made. We do hope that our analyses and findings inspire colleagues in the fields of economic geography and R&D internationalisation to engage in such endeavours.

F

  classified eight regions in the United States (MSA level) that host the largest number of biotechnology firms, as clusters and found that biotechnology

Table 3

 3 In addition to citation-weighted patent counts, we have also used the number of triadic patents as an alternative measure to control for differences in the quality of patents. Triadic patents are patents simultaneously applied at the patent offices of the US, Europe and Japan. Analyses with triadic patents lead to similar results as the analyses presented in table 3. Only in 7.35% of the observations (firm-year), firms develop biotech activities in more than 4 technology clusters. . and SCHNELLENBACH, J.(2006). What do we know about geographical knowledge spillovers and regional growth?: A survey of the literature. Regional Studies 40 (3), pp.375-395. FELDMAN, MP. and AUDRETSCH, DB. (1999). Innovation in cities: Science-based diversity, specialization and localized competition. European Economic Review 43(2), pp. 409-429. FELDMAN, M. and FLORIDA, R. (1994). The geographic sources of innovation: Technological infrastructure and product innovation in the United States. Annals of the Association of American Geographers 84(2), pp.210-229.FRENKEN, K.,VAN OORT, F. and VERBURG, T. (2007). Relate variety, unrelated variety and regional economic growth. Regional Studies 41(5), pp. 685-697. FURMAN, J., KYLE, M., COCKBURN, I. and HENDERSON, R. (2005). Public and private spillovers, location and the productivity of pharmaceutical research. Annales d'Economie et de Statistique 79/80, pp.167-190. GAMBARDELLA, A., HARHOFF, D. and VERSPAGEN, B. (2008). The value of European patents. CEPR discussion paper no 6848. GASSMANN, O. and VON ZEDTWITZ, M. (1999). New concepts and trends in international R&D organization. Research Policy 28 (2-3), pp. 231-250. GLAESER, E. L., KALLAL, H. D., SCHEINKMAN, J. A., and SHLEIFER, A. (1992). Growth in Cities. Journal of Political Economy 100, pp. 1126-1152. GLÄNZEL W., MEYER M., SCHLEMMER B., DU PLESSIS M., THIJS B., MAGERMAN T. HIPPEL, E. (1988). The Sources of Innovation. New York, Oxford University Press. WEBB, C., DERNIS, H. and HOISL, K. (2005). Analyzing European and international patent citations: a set of EPO patent database building blocks. OECD Science, Technology and Industry working papers 2005/9. OECD Publishing. WOOLDRIDGE J. (2001). Econometric Analysis of Cross Section and Panel Data. MIT Press, Cambridge, Massachusetts (USA). Fixed Effect Negative Binomial Regressions: Weighted Number of Biotech Patents Acting as Dependent Variable

	5 GLÄNZEL et al. (2004) defined and validated a search key to retrieve all EPO patents
	in the biotechnology domain in the period 1978-2001.
	6 The NUTS (Nomenclature of Territorial Units for Statistics) classification,
	established by Eurostat, provides a breakdown of European countries into regions,
	primarily based on institutional divisions currently in force in the country. The
	average population size for NUTS 1 regions in Europe (n=73) is 5.3 million. The
	United States of America consist of 50 sub-national entities called states, having their
	own state government with substantial state responsibilities. The average population

8

9

In Europe, 12% of biotech patents have multiple assignees (LECOCQ and

[START_REF] Lecocq | The impact of collaboration on the technological performance of regions: time invariant or driven by life cycle dynamics? An explorative investigation of European regions in the field of Biotechnology[END_REF]

.

10

Analogous to the cluster and other regions variables, we only count countries from Europe (EU-15 and Switzerland), US and Japan.

11 Firm level R&D expenses specifically related to biotechnology activities are not available.

12 and DEBACKERE K. (

2004

). Domain study "Biotechnology" -An analysis based on VON

Prior studies used cross-sectional data analysis techniques, and did not control for differences in firms' innovation efforts (absolute level of R&D expenses) when studying the impact of cluster membership on firms' technological performance.

[START_REF] Marshall | Principles of economics[END_REF],[START_REF] Arrow | The implications of Learning by Doing[END_REF] and ROMER (1986) (henceforth M-A-R) suggest

Acknowledgments: The authors acknowledge the "Steunpunt Ondernemen en Internationaal Ondernemen" and the "Fonds voor Wetenschappelijk Onderzoek" (G.0468.09) for the financial support. We also want to express our gratitude for the comments received from the participants at the Academy of Management Conference (Anaheim, 2008) and the Regional Studies Association Conference (Leuven, 2009).

We thank the editor and especially the anonymous referees for their valuable and usefull comments.

O30 -General < O3 -Technological Change|Research and Development < O -Economic Development, Technological Change, and Growth, R12 -Size and Spatial Distributions of Regional Economic Activity < R1 -General Regional Economics < R -Urban, Rural, and Regional Economics, R30 -General < R3 -Production Analysis and Firm Location < R -Urban, Rural, and Regional Economics Keywords: Cluster, Biotechnology, Innovation