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This paper evaluates the role of regional spillovers of knowledge in Brazilian municipalities. The main hypothesis here is that regional inequalities restrict the knowledge spillovers in developing economies. We use a random-effects spatial panel model with data for two years, 2010 and 2015. Estimations indicate that regional spillovers of knowledge are important for innovation in Brazilian municipalities. The local scientific structure and economic specialization are also relevant for municipal innovativeness. The findings herein also provide evidence suggesting that spillovers are spatially restricted and will tend to reinforce the long-term regional imbalances in the Brazilian innovation system in the foreseeable future.

Regional spillovers of knowledge in Brazil: evidence from science and technology municipal indicators