The importance of innovation for the economic performance of industrialized countries has been largely stressed … innovation, is the key parameter in determining sustained growth in a model with endogenous technological change. This paper … takles the extremely important task of identifying and estimating a "production function" of innovation for European regions …

The aim of this paper is to estimate the effect of research externalities across space, in generating innovation. We do … would increase the innovation of the region itself by 80-90%. Given the small size and the limited range of diffusion, we …