Intra and inter: regional knowledge spillovers in European Union

Abstract

Aim of this paper is to investigate the impact of intra-regional and inter-regional knowledge spillovers on regional new knowledge production. Knowledge diffusion in a region and between a pair of regions is definitely influenced by separate factors in a clear way. The most important thing, however, is to test the impact of these factors on knowledge spillovers when they operate, not separately but, simultaneously. We apply a knowledge production function to data for 210 European regions for a 12 years period (1995–2006). Our results indicate that the returns to scale with respect to the main inputs of the KPF, are increasing with the absence of spillovers and decreasing when knowledge spillovers exist. Technological diversity facilitates the creation of new ideas and knowledge. The cross regional technological proximity is positive and statistically significant. The spatial proximity is also positive and statistically significant. However, the simultaneous consideration of the spatial and technological proximity significantly influences the marginal effects of these independent variables on new knowledge creation. Thus, when a region is geographically contiguous to weak innovative systems then the knowledge spillovers are stronger between regions which innovate in similar technological fields. When a region is geographically contiguous to regions with high innovative activity the knowledge spillovers are stronger between regions which innovate in different technological fields. Finally, the location of a recipient region on the technological fields’ trajectory influences the impact of the technological distance on knowledge transfer.