Abstract
This paper analyses German manufacturing structure in comparison with other EU member states. The paper analyses trends in R&D expenditure and export market shares in the OECD countries, discussing how differences between national institutional frameworks may impact on the innovation strategies that domestic firms follow. It has recently been argued that there is an ‘innovation crisis’ within Germany. The available evidence shows that although Germany is maintaining an overall comparative advantage in R&D intensive industries, this is no longer the case in very high-technology industries.

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