Measuring the knowledge spillovers in France departments: Comparison to a Spatial Econometrics Approach

This paper aims to measure knowledge spillovers using two methods across 94 French departments. In the first part, we estimate the reduced form of the innovation-generating equation for French departments by distinguishing the effects of R&D carried out in several geographic areas (for example from 0 to 200km, from 200 to 400 km, and from more than 400); the purpose of this first method is to measure the presence of knowledge spillovers. In the second part of our work, the analysis uses spatial econometrics to measure knowledge spillovers and to question the assumptions on the relationship between spatial proximity and innovation. We will first detect the existence of spatial correlation by calculating the Moran's test with different contiguity matrices, and then we use a spatial model to model innovation data; the purpose of this second method is to show that knowledge spillovers are localized. The mains focus in this study is to compare the results found by using these two methods. This allows us to measure geographical proximity and to show that spillovers are localized.