Knowledge Spillovers: An Evidence from The European Regions

Abstract

The article deals with the issue of knowledge spillovers in the European regions. For this purpose, a standard Knowledge Production Function (KPF) approach was extended by the application of spatial econometrics methods. Our analysis started from the construction of the alternative structures of the spatial weight matrices. These matrices were based on technological and institutional proximities, which represent compelling alternatives to geographic proximity regarded as a kind of all-encompassing connectivity measure. The next step in our analysis was the modeling of regional knowledge generation processes. We treated R&D expenditures and human resources in science and technology as the input measures and patent applications to the European Patent Office as the output measure in our basic and extended models. The results show that the scope and direction of knowledge spillovers are sensitive to the type of knowledge (tacit vs. codified) and proximity dimension engaged. These findings contribute to the current debate in the geography of innovation and economics of knowledge literature.