Analysis of the effect of territorial factors on regional innovation in the state of São Paulo, Brazil

This paper examines the geography of innovation in the Sao Paulo micro-regions. Using data on innovation inputs and outputs at the regional level, this paper examines how territorial factors affect innovation in the regions of the state of Sao Paulo, Brazil. Previous studies show that local innovation is linked to the quantity and quality of innovative inputs, and the main characteristics of regions are configured as regional driving forces of innovation. However, most studies on this subject have focused on developed countries; few studies have examined developing countries. In this way, this paper presents new empirical evidence on the role of territorial factors in fostering innovation in Brazilian regions. The main results show that local R&D expenditures and the local externalities generated by diversified industry and social filters are the main drivers of regional innovation.