Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: In this paper we quantitatively review the empirical literature on spatial knowl¬edge spillovers in Europe by means of meta-analysis to determine the extent to which such spillovers have been empirically documented as well as the spatial reach of these spillovers. In addition, we will apply meta-regression analysis to analyze the determinants of observed heterogeneity across and between publications. To our knowledge this is the first study of its kind. Our results show that if total local R&D expenditure in a European region increases by 1%, then the number of patents in that region, on average, increases by about 0.5%. Spatial knowledge spillovers induce a positive effect on local knowledge production, however, this effect proves to be small around 0.07%. Spatial weighting regime seems to matter. If R&D expenditures in other regions are weighted by distance in kilometers or minutes (instead of a binary contiguity matrix) then the spillover effect on average will be larger. Also, public R&D expenditure is found to have a lower impact on local patent production compared to the private R&D expenditure.

Keywords: Knowledge spillovers; knowledge externalities; meta-analysis; Europe

JEL-codes: O32; O33; R19

32 pages, July 9, 2012

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