The digital layer: alternative data for regional and innovation studies

The lack of large-scale data revealing the interactions amongfirms has constrained empirical studies.Utilizing relational web data has remained unexplored as a remedy for this data problem. Weconstructed a Digital Layer by scraping the inter-firm hyperlinks of 600,000 Germanfirms and linked theDigital Layer with several traditional indicators. We showcase the use of this developed dataset by testingwhether the Digital Layer data can replicate several theoretically motivated and empirically supportedstylized facts. The results show that the intensity and quality offirms’hyperlinks are strongly associatedwith the innovation capabilities offirms and, to a lesser extent, with hyperlink relations to geographicallydistant and cognitively closefirms. Finally, we discuss the implications of the Digital Layer approach foran evidence-based assessment of sectoral and place-based innovation policies.