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Innovation and spillovers in regions: Evidence from European patent data

  • Bottazzi, Laura
  • Peri, Giovanni

The aim of this paper is to estimate the effect of research externalities across space, in generating innovation.We do so by using R&D and patent data for eighty-six European Regions in the 1977-1995 period. We find that spillovers exist for regions within a distance of 300 Km from each other. The estimates are robust to simultaneity, omitted variable bias, different specifications of distance functions, country and border effects. The size of these spillovers is small, though. Doubling R&D spending in a region would increase the output of new ideas in other regions within 300 Km only by 2-3%, while it would increase the innovation of the region itself by 80-90%. Given the small size and the limited range of diffusion, we interpret these externalities as the result of local diffusion of non-codified knowledge, embodied in people and spreading via personal contacts. This interpretation is reinforced by the finding that the spillovers are somewhat weaker across national borders.

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Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 47 (2003)
Issue (Month): 4 (August)
Pages: 687-710

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Handle: RePEc:eee:eecrev:v:47:y:2003:i:4:p:687-710
Contact details of provider: Web page: http://www.elsevier.com/locate/eer

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  1. Coe, D.T. & Helpman, E., 1993. "International R&D Spillovers," Papers 5-93, Tel Aviv.
  2. Wolfgang Keller, 2002. "Geographic Localization of International Technology Diffusion," American Economic Review, American Economic Association, vol. 92(1), pages 120-142, March.
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  14. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-40, June.
  15. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
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  18. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  19. repec:fth:harver:1473 is not listed on IDEAS
  20. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-84, August.
  21. Gordon H. Hanson, 2000. "Scale Economies and the Geographic Concentration of Industry," NBER Working Papers 8013, National Bureau of Economic Research, Inc.
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