R&D Spillover Effects: Impact of R&D Expenditure in the Business Sector on Innovation Activities

The paper examines the role of spatial interactions in the context of regional innovation activities across 220 European Union (EU) regions. The hypothesis was that there is a global level of spillover innovation effects among the EU regions. This hypothesis was verified based on the spatial autoregressive models and data comes from The Regional Innovation Scoreboard 2019. Patent Cooperation Treaty (PCT) applications were considered as an innovative output and three innovative inputs: scientific publications among the top-10% most cited publications worldwide, Research & Development (R&D) expenditure in the business sector and Small and Medium-Sized Enterprises (SME) introducing product or process innovations were used. We found out that all impacts associated with all innovative inputs were statically significant and thus innovation activities performed in one region do not have just local character. In addition, spatial partitioning of impacts related to the R&D expenditure in the business sector showed that even the regions corresponding to the fifth degree based on the spatial maximum likelihood estimation of the neighbourhood still have a statistically significant impact.