Innovation, Demand and Knowledge Spillovers: Theory and Evidence from European Regions

IGIER Working Paper No. 153

53 Pages Posted: 4 Aug 1999

See all articles by Laura Bottazzi

Laura Bottazzi

University of Bologna - Department of Economics; Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research; University of Bologna - Rimini Center for Economic Analysis (RCEA)

Giovanni Peri

University of California, Davis - Department of Economics

Date Written: July 1999

Abstract

The importance of innovation for the economic performance of industrialized countries has been largely stressed recently by the theoretical and empirical literature. Very few studies have carefully considered the determinants of European innovation, the productivity of its R&D and the existence of knowledge spillovers across regional boundaries. Here we develop a model which, emphasizing "the demand pull" as a key exogenous determinant of long-run innovation across regions, allows us to estimate the returns to regional R&D as a generator of innovation. We find that most of the cross-regional differences in innovation rates can be explained by their own R&D, even after correcting for the endogeneity bias. Moreover, significant spillovers are found among geographically close regions, especially if they are technologically similar.

JEL Classification: O3, R0, R1

Suggested Citation

Bottazzi, Laura and Peri, Giovanni, Innovation, Demand and Knowledge Spillovers: Theory and Evidence from European Regions (July 1999). IGIER Working Paper No. 153. Available at SSRN: https://ssrn.com/abstract=170590 or http://dx.doi.org/10.2139/ssrn.170590

Laura Bottazzi (Contact Author)

University of Bologna - Department of Economics

Strada Maggiore 45
Bologna, 40125
Italy

Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research ( email )

Via Roentgen 1
Milan, 20136
Italy
+39 02 5836 3326 (Phone)
+39 02 5836 3302 (Fax)

HOME PAGE: http://www.igier.uni-bocconi.it/bottazzi

University of Bologna - Rimini Center for Economic Analysis (RCEA) ( email )

Via Patara, 3
Rimini (RN), RN 47900
Italy

Giovanni Peri

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-3033 (Phone)
530-752-9382 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
316
Abstract Views
1,447
rank
94,683
PlumX Metrics