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Innovation and Spillovers in Regions: Evidence from European Patent Data

  • Laura Bottazzi
  • Giovanni Peri

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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Paper provided by IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University in its series Working Papers with number 215.

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  1. Gordon H. Hanson, 1998. "Market Potential, Increasing Returns, and Geographic Concentration," NBER Working Papers 6429, National Bureau of Economic Research, Inc.
  2. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
  3. Antonio Ciccone & Robert E. Hall, 1993. "Productivity and the Density of Economic Activity," NBER Working Papers 4313, National Bureau of Economic Research, Inc.
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  6. 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.
  7. Jonathan Eaton & Eva Gutierrez & Samuel Kortum, 1998. "European technology policy," Economic Policy, CEPR;CES;MSH, vol. 13(27), pages 403-438, October.
  8. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  9. Antonio Ciccone, 1998. "Agglomeration-effects in Europe," Economics Working Papers 499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
  10. Zvi Griliches, 1990. "Patent Statistics as Economic Indicators: A Survey," NBER Working Papers 3301, National Bureau of Economic Research, Inc.
  11. Laura Bottazzi & Giovanni Peri, 2000. "Innovation and Spillovers: Evidence from European Regions," CESifo Working Paper Series 340, CESifo Group Munich.
  12. Wolfgang Keller, 2000. "Geographic Localization of International Technology Diffusion," NBER Working Papers 7509, National Bureau of Economic Research, Inc.
  13. 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.
  14. 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.
  15. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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  17. 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.
  18. Griliches, Zvi, 1992. " The Search for R&D Spillovers," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(0), pages S29-47, Supplemen.
  19. repec:fth:harver:1473 is not listed on IDEAS
  20. 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.
  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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