Spatial distribution of innovation and production in the European regions

This paper explores the spatial distribution of innovative and productive activity across 138 regions of 17 countries in Europe (the 15 members of the European Union plus Switzerland and Norway). The analysis is based on an original statistical databank set up by CRENoS on regional patenting at the European Patent Office spanning from 1978 to 1997 and classified by ISIC sectors (3 digit) and on the Cambridge Econometrics database on production activity. In a first step, a deep exploratory spatial data analysis of the dissemination of innovative activity in Europe is performed. The spatial mapping of innovation is compared to the distribution of productive activity. Some global and local indicators for spatial association are presented, summarising the presence of a general dependence process in the distribution of the phenomena under examination. Such an analysis is implemented for different manufacturing macro-sectors to assess for the presence of significant differences in the their spatial features. Moreover, the extent and strength of spatial externalities are evaluated for three different periods: 1981-83, 1988-90 and 1995-97. Finally, we attempt to model the behaviour of innovative activity and knowledge externalities paying great attention to the spatial perspective by means of several contiguity and distance indicators. The results obtained beforehand are considered in order to introduce the spatial dependence process in the model.