The Geographic Distribution of Patents and Value Added Across European

Until recently, the geographic element of concentrations of economic activity and knowledge spillovers was almost completely disregarded by economic theory. Although space is a central concept in theories in the field of geography, geographers have not attached great value to technology as a motivating factor for clustering of economic activity. A pooled market of skilled labour and the availability of nontraded inputs are considered much more important as factors that induce the clustering of firms (Krugman 1991). Several recent studies for the US (among others Jaffe, Trajtenberg and Henderson 1993, Audretsch and Feldman 1994, Feldman 1994) examined the extent to which innovative as well as economic activity clusters spatially. Until recently there were no data available for Europe on this issue. By means of a new data set, namely regional patent data for Europe, this paper will try to identify differences in geographic concentration in patents (as a proxy for innovation) and manufacturing value added over several industries. Several statistical techniques will be used to gather information on the spatial pattern of variation in patents and manufacturing value added across European regions.