European innovative regions:

Innovation is one of the main drivers of economic growth in the Western world, but it is still very intangible. What are the main drivers of innovation? Although the amount of literature on innovation is rising in the last decades it is still not clear which factors, besides R&D, are important for innovation. In this study the role of leader firms on innovation in European NUTS 3 regions will be examined. The main question of the study is: are leader firms essential or are there other ways to be among the most innovative regions in Europe. The outcome of this study can be important for policy makers as it shows what influence they can have on innovation. The 37 most innovative regions of Europe are combined in this study and data is used between 2000 and 2011. As no real definition of a leader firm exist one is created out of the amount of patents that a leader firm produces in the region. Other variables included in the study are; R&D expenditure, population density, education and research facilities and the size of service sector. Results show that regions with a leader firm have more patents than regions without a leader firm, although insignificant in the full model. But because 16 out of the 37 regions have no leader firm the conclusion is that leader firms are not essential to be among the most innovative regions in Europe. There are other ways to be among the innovation leaders as a region.