Productivity across European regions is related to three types of networks that mediate R&D-related knowledge spillovers: trade, co-patenting and geographical proximity. Both our panel and instrumental variable estimations for European regions suggest that network relations are crucial sources of R&D spillovers, but with potentially different features. Both import and co-patenting relations affect local productivity directly, but spillovers from innovation-leading regions are effective only when they are import-mediated and when recipient regions have a solid knowledge base. From a policy perspective, this may frustrate recent European policy initiatives, such as Smart Specialization, which are designed to benefit all regions in Europe.

economic networks, knowledge, O32, Productivity, R11, regions, trade
Regional Economic Activity: Growth, Development, and Changes (jel R11), Management of Technological Innovation and R&D (jel O32),
Journal of Economic Geography
Department of Applied Economics

Cortinovis, N, & van Oort, F.G. (2019). Between spilling over and boiling down: Network-mediated spillovers, local knowledge base and productivity in European regions. Journal of Economic Geography, 19(6), 1233–1260. doi:10.1093/jeg/lby058