We develop an empirical approach to examine static and dynamic knowledge externalities in the context of a regional total factor productivity relationship. Static externalities refer to current period scale or industry-size effects which have been labeled localization externalities or...

This study investigates the pattern of knowledge spillovers arising from patent activity between European regions. A Bayesian hierarchical model is developed that specifies region-specific latent factors modeled using a connectivity structure between regions that can reflect geographical as well...