In economic theory, one can distinguish between variety as a source of regional knowledge spillovers, called Jacobs externalities, and variety as a portfolio protecting a region from external shocks. We argue that Jacobs externalities are best measured by related variety (within sectors), while the portfolio argument is better captured by unrelated variety (between sectors). We introduce a methodology based on entropy measures to compute related variety and unrelated variety. Using data at the NUTS-3 level in the Netherlands for the period 1996-2002 we find that Jacobs externalities enhance employment growth, while unrelated variety dampens unemployment growth. Productivity growth can be explained by traditional determinants including investments and R&D expenditures. Implications for regional policy follow.

Collaboration and the exchange of knowledge are supposedly made easier by geographical proximity because of the tacit character of knowledge. Recently a number of scholars' criticised this view on geographical proximity as being oversimplified and argued that the precise role of geographical proximity for knowledge exchange and collaboration still remains unclear. This paper analyses the role of geographical proximity for collaborative scientific research in science-based technologies between universities, companies and governmental research institutes. We test the hypothesis that the collaboration between different kinds of organisations is more geographically localised than collaboration between organisations that are similar due to institutional proximity. Using data on co-publications, collaborations patterns are analysed and the hypothesis is confirmed. Copyright (c) 2007 the author(s). Journal compilation (c) 2007 RSAI.

Conventional studies of bilateral trade patterns specify a log-normal gravity equation for empirical estimation. However, the log-normal gravity equation suffers from three problems: the

This paper analyses the effect of knowledge spillovers from academic research on regional innovation. Spillovers are localized to the extent that the underlying mechanisms are geographically bounded. However, university-industry collaboration-as one of the carriers of knowledge spillovers-is not limited to the regional scale. Consequently, we expect spillovers to take place over longer distances. The effect of university-industry collaboration networks on knowledge spillovers is modelled using an extended knowledge production function framework applied to regions in the Netherlands. We find that the impact of academic research on regional innovation is mediated not only by geographical proximity but also by social networks stemming from collaboration networks.

We analyse inter-regional research collaboration as measured by scientific publications and patents with multiple addresses, covering 1316 NUTS3 regions in 29 European countries. The estimates of gravity equations show the effects of geographical and institutional distance on research collaboration. We also find evidence for the existence of elite structures between excellence regions and between capital regions. The results suggest that current EU science policy to stimulate research collaboration is legitimate, but doubt the compatibility between EU science policy and EU cohesion policy. JEL Classification R10 · R12