Regional effectiveness of innovation: leaders and followers of the EU NUTS 0 and NUTS 2 regions

Innovation, which constitutes an important factor for growth, strongly diversifies regions' level of development. To compare regional innovativeness of EU territories, we employ the data envelopment analysis (DEA) framework. We analyse the relative efficiency of regions using a standard DEA for the country-level, a spatial DEA for regional analysis and the Malmquist indexes to measure the innovation productivity change over time. In our research, the inputs are human capital and R&D expenditure, while the outputs include the number of patents and GDP. We combine the results of these methods with spatial statistics to pinpoint the spatio-temporal patterns of innovation efficiency across European regions. We confirm validity of the assumed complex spatial structure of innovation efficiency. Our study indicates that innovation efficiency at the country-level is dissimilar, or even partially contradictory, to NUTS 2 outcomes due to high regional dispersion within state borers and similarities among neighbouring regions from different countries.