University Technological Output and Industrial Specialization in Italian Regions

Regional specialization is a complex evolutionary process in which new industries and technologies evolve from existing ones following a non-ergodic path-dependent branching process. Although the scientific literature acknowledges the role of universities in shaping both the industrial and technological trajectories of geographical regions, empirical studies analyzing the link with the emergence of a local industrial specialization are relatively few. Our work contributes to filling this gap by investigating the relationship between the stock of patents developed by universities in a specific technology and the subsequent industrial specialization of the hosting region in the same domain. The empirical setting focuses on all Italian provinces (i.e., the geographical areas at the third level of the NUTS classification) in the years from 1995 to 2018. We examine the effect of the local and the neighboring knowledge stocks on subsequent industry specializations identified through the revealed technology advantage index. The results indicate the presence of a positive and significant correlation, robust to the inclusion of multiple fixed effects and several alternative model specifications. Instrumental variable regressions suggest that a causal relationship is likely to exist. Patent stocks of universities located in neighboring geographical areas have also a positive impact on the specialization, although of a smaller magnitude. Moreover, the patenting activity of local universities has an additional positive effect in both southern geographical areas and academies with lower internationalization levels whereas no significant premium or penalty is detected for high-tech and low-tech patent fields.