On the impact of knowledge and institutional spillovers on RIS efficiency. Evidence from Italian regional level

Using regional Italian data over the 2004-2011 period, we embed, within the framework of a double-bootstrap Data Envelopment Analysis (DEA), both knowledge and institutional spillovers to appraise how the latter affect Regional Innovation System (RIS) efficiency and further investigate how the quality of institutions interacts with RIS efficiency. Our evidence suggests that both knowledge and institutional spillovers enhance RIS efficiency. We find evidence of spillovers of control of corruption, government effectiveness, voice and accountability and regulatory quality, though these results crucially depend on the set of inputs employed. Once the two types of spillovers enter jointly, rather than separately, our specifications, the evidence indicates that both these spillovers positively affect RIS efficiency and their impact is quantitatively comparable. There is also some evidence of a positive effect of regional institutional quality on RIS efficiency, although the result is mediated by increased government effectiveness. In terms of policy implications, the evidence reported in this paper suggests that measures aimed at favouring cooperation among firms, that facilitate an easier imitation strategy and that improve governance are highly recommendable.