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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. Jonathan Eaton & Eva Gutierrez & Samuel Kortum, 1998. "European technology policy," Economic Policy, CEPR;CES;MSH, vol. 13(27), pages 403-438, October.
  2. David T. Coe & Elhanan Helpman, 1993. "International R&D Spillovers," NBER Working Papers 4444, National Bureau of Economic Research, Inc.
  3. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
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  15. repec:fth:harver:1473 is not listed on IDEAS
  16. Jeffrey I. Bernstein & M. Ishaq Nadiri, 1986. "Research and Development and Intraindustry Spillovers: An Empirical Application of Dynamic Duality," NBER Working Papers 2002, National Bureau of Economic Research, Inc.
  17. Wolfgang Keller, 2000. "Geographic Localization of International Technology Diffusion," NBER Working Papers 7509, National Bureau of Economic Research, Inc.
  18. Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
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  20. Maurseth, Per Botolf & Verspagen, Bart, 2002. " Knowledge Spillovers in Europe: A Patent Citations Analysis," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 531-45, December.
  21. Laura Bottazzi & Giovanni Peri, 2000. "Innovation and Spillovers: Evidence from European Regions," CESifo Working Paper Series 340, CESifo Group Munich.
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