Abstract
This study introduces a two-stage competition model to investigate major features of land-use strategies for German municipalities. First, a municipality should solve economic and interest conflicts related to its preference of high-quality sites for high-tech firms against other land needs. Second, competition among municipalities with high-quality sites is necessary for attracting innovative firms. A local land-use policy is combined with the industrial policy in Germany: for Potsdam the study reveals strengths and weaknesses of the real estate market in the context of urban competition for attracting high-tech firms, and examines its future chances and risks for the location of various economic activities with particular consideration of local clusters. Science Park Adlershof (Berlin) appears to provide a successful combination of technology policies and municipal land-zoning strategies to guarantee a superior position in the competition for creating incubators for innovative small and medium-sized enterprises. Municipalities also cooperate, because such cooperation provides larger sites, generates economies of scale and contributes to a smooth suburbanization process.
JEL Classification: H42, O3, R52, R58
