Modeling regional innovation in Egyptian governorates: Regional knowledge production function approach

Abstract

Knowledge and innovation have become a significant source of modern regional development. The paper aims to study the spatial association of innovation and model innovation, besides critiquing regional innovation policy, using the regional knowledge production function approach. At the level of the Egyptian governorates, the number of patent applications has been used as a proxy for innovation. The study uses cross-sectional data for patents in 2018 with lagged time variables for knowledge input factors. The study contributes towards applying the knowledge production function at the level of the Egyptian governorates for the first time. Exploratory spatial data analysis (ESDA) and ordinary least squares (OLS) regression are used, using the knowledge sources and localized characteristics. Our analysis found that research and development activities for academic institutions are associated with innovation outputs. In the context of the Egyptian regional innovation system, the contribution of private research activities is perceived to be negligible, and the innovation outputs are highly associated with the spatial association of the Egyptian governorates.