Regional heterogeneity and interregional research spillovers in European innovation: modeling and policy implications

Gianni Guastella and Frank Oort

No 1506, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: In agglomeration studies, the effects of various regional externalities related to knowledge spillovers remain largely unclear. To explain innovation clustering, scholars emphasize the contribution of Localized Knowledge Spillovers (LKS) and, specifically when estimating the Knowledge Production Function (KPF), of (interregional) research spillovers. However, less attention is paid to other causes of spatial heterogeneity. In applied works, spatial association in data is econometrically related to evidence of research spillovers. This paper argues that, in a KPF setting, omitting spatial heterogeneity might lead to biased estimates of the effect of research spillovers. As an empirical test, a spatial KPF is estimated using EU25 regional data, including a spatial trend to control for unexplained spatial variation in innovation. Accounting for geographical characteristics substantially weakens evidence of interregional research spillovers.

Keywords: Generalized Additive Models; Knowledge Spillovers; Regional Innovation; European Union (search for similar items in EconPapers)
JEL-codes: R12 R58 (search for similar items in EconPapers)
Date: 2015-03, Revised 2015-03
New Economics Papers: this item is included in nep-cse, nep-eff, nep-eur, nep-geo, nep-ino, nep-knm, nep-sbm and nep-ure
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Citations: View citations in EconPapers (4)

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