Do university patents have an impact on local innovative activities? Evidence from a large panel of regions from the United States and Europe

This paper investigates the connection between inventions by non-business organisations (NBOs) and those by businesses at local level in the U.S. and EU15 countries using patents as indicators of innovative activities. We find that patenting activity by businesses and NBOs tends to take place in the same regions, once controlled for other factors like size of the region. Second, co-location is stronger within individual technological fields, suggesting that the local connection between NBOs and business inventions is mainly technology specific rather than generic and coincidental. Third, co-location increased over time, between the early 1990s and the mid-2000s, possibly reflecting the impact of changes in government policy and the economic environment of innovation. Lastly, we propose a knowledge production function approach to assess the impact of NBO patenting on inventive entrepreneurship, taking into the account the pre-existing local level of innovation by the business sector and innovation spillovers from neighbouring regions. We find extensive evidence that regions where NBOs are more inventive are also those where more new inventive enterprises are established.