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CIRCLE, Center for Innovation, Research and Competences in the Learning Economy, Lund University Papers in Innovation Studies, CIRCLE, Center for Innovation, Research and Competences in the Learning Economy, Lund University

No 2008/3:
The Effects of R&D on Regional Invention and Innovation

Olof Ejermo () and Urban Gråsjö ()

Abstract: This paper examines the effects of regional R&D on patenting for Sweden within an accessibility framework. We use two measures of patenting: number of patents granted per capita and a composite of quality-adjusted patents which we regard as an innovation indicator, respectively. Three conclusions emerge. First, we find that the specification where innovations per capita is used as a dependent variable performs much better than with granted patents per capita for capturing relationships with regional R&D. In fact, quantile regressions over the distribution of different patenting and innovation levels per capita show that R&D efforts within regions affect innovations per capita positively, except for the regions with the lowest levels of R&D. The effects on granted patents per capita are less robust and depend inconsistently on the level of R&D. Secondly, accessibility to inter-regional R&D do not affect innovation significantly in our results, which suggests that effects are locally bounded. This implies that studies of the R&D-innovation relationship are plagued by misspecification, since studies tend to show that R&D-effects diffuse to other regions. This is also the case in our study; the inter-regional effects are an important factor for granted patents. Third, the share of university R&D of all regional R&D has no effect on patenting, which suggests that the two types of R&D are substitutes. In view of these results the recommendation must be to use quality-adjusted patents for regional innovation studies rather than patent grants.

Keywords: R&D; patenting; innovations; regions; spatial dependence.; (follow links to similar papers)

JEL-Codes: O30; (follow links to similar papers)

27 pages, June 1, 2008

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