We test the hypothesis that large firms devote a higher proportion of their expenditure on research and development (R&D) on process innovation than smaller firms.

Literature suggests that location should matter for R&D activities. However, attempts to empirically detect differences in innovation activity between regions have so far been rather unsuccessful. Using a unique data set which contains comparable information about manufacturing enterprises in...

The paper deals with the significant impact of location on innovation activity that has been found in many empirical studies. Main elements of such an explanation are the specific problems of a division of innovative labor. Based on an outline of these issues the concept of a regional innovation...