The aim of this article is to assess the extent to which the degree of specialization or diversity externalities may affect the regional innovative performance. Additionally, the influence of other regional factors on the innovative output is examined, such as regional R&D capacity, schooling of local population and the temporal lag of innovation. The database is organized into 63 microregions of the state of São Paulo from 1996 to 2003. These data were analyzed by means of dynamic spatial panel data models. The main result shows that diversity and specialization externalities are equally important to the microregion's innovative performance.
regional innovation system; diversity and specialization externalities; dynamic panel data models
